LCV segment in Gujarat likely to grow at 25%

The light commercial vehicle (LCV) segment in Gujarat is witnessing a steady growth of over 25 per cent, say local dealers and manufacturers. For players like Atul Auto and Ashok Leyland, among others, the growth in LCVs is attributed to rise in retail demand in major cities like Ahmedabad, Vadodara and Rajkot.

For instance, Rajkot-based Atul Auto has been enjoying over 20 per cent growth in its LCVs in the state at over 1,000 units per month. Similarly, Planet Auto Lines, the Ahmedabad-based dealer for Ashok Leyland, which launched dealership for North and Central Gujarat in February has already been witnessing sales of over 250 units on monthly basis.

"Retail and FMCG sector has been growing in the past few months in Gujarat. This has led to growth in demand for LCVs in the state. On a monthly basis, we have been witnessing a growth of over 20 per cent with over 1,000 units being sold in the state itself," said Paul Zachariah, vice president - marketing, Atul Auto Ltd. which manufactures three-wheeler commercial vehicles.

Seconding Zachariah's views is Nishant Anantani, general manager, Planet Auto Lines, which has already seen skyrocketing sales of Ashok Leyland's LCVs in Gujarat. "It's been hardly a month since we have launched dealership of light commercial vehicles of Ashok Leyland but we have seen tremendous growth in the sales. This is because not only is demand in FMCG growing within the cities but also in the rural areas," said Anantani.

According to Anantani, with retail and FMCG demand growing in rural areas, LCVs are being substituted for heavy vehicles in order to increase reach in remote places.

On its part, research firm Prabhudas Lilladher Pvt. Ltd. also cites discounts on purchase offered by commercial vehicle dealers a reason for growth in LCVs. "Our interaction with industry experts suggests that LCV goods segment is likely to grow at 25-26 per cent, whereas medium and heavy commercial vehicle goods segment can grow at 6-7 per cent in FY 2012. The months of February and March 2012 should witness increased sale volumes because the fleet owners are making extra purchases due to tax benefit of 50 per cent depreciation allowance under the Income Tax Act and hefty discounts on purchase offered by commercial vehicle dealers," said Surjit Arora, Research Analyst at Prabhudas Lilladher Pvt. Ltd.