Ashok Leyland Banks On New Emission Norms For Sales Boost
Ashok Leyland Ltd. plans to ramp up its capacity as India’s second-largest commercial vehicle maker expects a surge in demand on account of pre-buying ahead of the implementation of new emission norms in April next year.
“Across the world, there has been a huge pre-buying during the Euro VI (European equivalent of Bharat Stage VI norms) adoption. The buying is 25-50 percent higher,” Managing Director and Chief Executive Officer Vinod Dasari said. “We took the board’s approval three to four months ago to spend Rs 100-120 crore this year to increase the capacity to meet the pre-buying demand.”
The Chennai-based company wasn’t prepared for BS IV emission norms when it was implemented in April 2017. It retrofit its older BS III vehicles to make them complaint with new emission norms and sold older engines and spare parts in the after-sales market to reduce the financial loss it incurred. So, now while the government planned to skip the fifth stage and jump to BS VI from April 2020, Ashok Leyland wants to get a head start over others.
Dasari also said the slowdown in sales during November and December was due to a higher base. “It is a temporary blip. If you look at the larger picture from April-December, the overall volume is up by about 25 percent,” he said.