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Ashok Leyland sees bus sales growing

The growing mobility of India's population should boost industry demand for buses by 6-7 per cent in each of the next few years, Indian commercial vehicles maker Ashok Leyland Ltd says.

"The demand for buses is directly related to population - the population on the move and the rate of urbanisation," Amol Sandil, executive director marketing at Ashok Leyland said over the telephone from Madras.

"We expect this demand to continue to grow at about six-to-seven percent each year," Sandil said in an interview.

Ashok Leyland, one of India's two key commercial vehicle makers, increased its bus sales 25.1 per cent in April-November to 7,445 units, while the overall domestic bus market grew 6 per cent to about 15,000 units.

The growth in Ashok Leyland's bus sales has helped cushion the slump in sales of its goods vehicles which have fallen 31.2 per cent to 9,602 units.

Sandil said bus sales to both transport companies owned by India's provincial governments as well as to private fleet operators had risen. State-run transport firms contribute about 70 per cent of demand.

Purchases by state-run transport firms of Gujarat, Maharashtra, Bombay, Delhi, Calcutta, Karnataka and by private fleet operators around India's western coast and in Punjab and Haryana had grown.

Recent product innovations by the firm including introduction of cleaner engines running on natural gas and automatic transmissions especially suited for urban transport also helped increase sales, he said.

Demand seen improving

The jump in bus sales contrasts starkly with total medium and heavy commercial vehicles sales, which plunged 20.7 per cent in the first eight months of financial year 2000-01 (April-March) to 49,894 units.

Buses make up a quarter of total commercial vehicle sales.

Sandil said he expected demand for commercial vehicles to improve in the January-March quarter as a new agriculture crop is harvested and the railways, which compete with road transport for moving goods, hit a freight capacity ceiling.

Most of the rise in freight traffic as a result of India's industrial production growth had been snared by the railways, he said.

India's industrial production increased 5.7 per cent in April-October over the same year-ago period.

Ashok Leyland's total medium and heavy commercial vehicles sales fell 11.6 per cent to 18,367 units in April-November, while that of market leader Telco dropped 25.1 per cent to 31,451 units.

Two other firms, Hindustan Motors and Volvo, make a small number of trucks and buses.

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