A surge in e-commerce activity is translating into increased demand for trucks, essential for efficient delivery operations. This trend is consequently leading to improved sales for truck manufacturers, noted Shenu Agarwal, MD & CEO of Ashok Leyland in a conversation with CNBC-TV18.

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"We are seeing an uptick in e-commerce demand, we are seeing that rural demand is actually picking up for the last couple of months," Agarwal said.

The Indian e-commerce sector, buoyed by the rising trend of online shopping, is expected to grow at a compound annual growth rate (CAGR) of 27%, reaching a market size of $163 billion by 2026. This growth is nearly triple that of the overall retail market, per a Redseer report.

The commercial vehicle maker is hopeful that the light commercial vehicle (LCV) market will grow at the projected rate of 4-5% in the coming quarters, after a slightly lower growth in the first half.

In October, the Hinduja Group flagship company unveiled the ecomet Star 1915 truck in the intermediate commercial vehicle segment. The truck with a Gross Vehicle Weight (GVW) of 18.49 tonne is positioned to address the logistical demands of customers engaged in e-commerce, parcel delivery, and transportation of fresh produce among others, the company said.

Also read: Ashok Leyland Q2: Results miss Street estimates, shares decline over 1%

Ashok Leyland's total vehicle sales (domestic + exports) in October 2023 rose 13% year-on-year (YoY) to 16,864 units from 14,863 units sold in October 2022.

Domestic sales were up 14% at 15,759 units as against 13,860 units sold in October 2022.

Total Medium and Heavy Commercial Vehicle (MHCV) sales for October 2023 grew 12% YoY at 10,185 units from 9,054 units for October 2022. Total LCV sales rose 15% YoY to 6,679 units from 5,809 units last year.

The company attributed the growth in MHCV to favourable macroeconomic factors and maintained the goal of achieving an 8-10% market share for the entire year. In the LCV segment, the expected turnaround in the coming quarters is likely to aid in achieving a 35% market share.

Agarwal noted that the company is adequately equipped in terms of capacity for the upcoming two to three years Currently, their capital expenditures are primarily directed towards product development, with a significant focus on investing in alternative fuel and new technology vehicles.

First Published:Nov 10, 2023 2:55 PM IST