Ashok Leyland Rolling Out Vehicles Despite Sales Lull

Ashok Leyland is continuing to produce medium & heavy commercial vehicles (M&HCVs) at a regular pace even as its sales have slowed down considerably, resulting in a yawning gap between its production and sales figures.

During the quarter ended December, the Chennai-based company's production of 8,929 vehicles was unusually high, and exceeded its sales of 5,427 units during the quarter by over 64 per cent, as per Siam figures.

In December, when the company suffered a sharp 35 per cent decline in sales, its volume sales of 1,669 units were at a five year low during December. However, its production figure of 3,103 units, which was almost twice the sales during the month, was higher than vehicles produced over the last five years during the same month.

R Seshasayee, managing director of Ashok Leyland said, "Various state road transport corporations, which were expected to place their orders, have delayed their purchase decisions, because of which our production is higher than the sales. However, we expect these orders to materialise during the fourth quarter. We also expect more orders to come from other areas."

Ashok Leyland, the Hinduja group flagship, has recently bagged an order to export around 500 CV chassis to Bangladesh. Further, it has bagged collective orders for over 2,200 CNG buses from the Delhi Transportation Corporation and other private operators. Most of these orders are yet to be completed.

According to auto analysts, the fourth quarter is traditionally the best one for the industry, including the commercial vehicle segment. "During the fourth quarter, all companies step up production, in addition to clearing old stocks."