Truck maker Ashok Leyland to give another shot at car venture

Chennai-based truck and bus maker Ashok Leyland has not given up on its maiden car venture, for which it piggy-backed on Japanese giant Nissan, despite extremely poor sales.

The multi-seater van Stile saw sales of just 311 units in the April-January period, which has more than halved compared to the same period previous year that witnessed sales 694 units.

This is the first time that India's second largest heavy truck maker has plunged into the car segment with no prior experience. The company has said in the past that it will restrict itself to the Stile and will not go any further in the personal vehicle space.

The van is built on the same Nissan platform that makes the Evalia. While the Nissan Evalia is targeted at the personal vehicle segment the Stile is primarily targeting the taxi segment. However, the Stile is also used as a personal vehicle.

Gopal Mahadevan, chief financial officer, Ashok Leyland, said, "We have deeply realised that fact that we have not done well (with the Stile). It is the only product in our portfolio where we had a challenge. We are looking at having a relaunch of the product, bring its back with some renewed vigor but nothing is planned as of now".

One of the main reasons why Stile has not done well is because of the distribution strategy adopted by Ashok Leyland. The company set up retail outlets of the car within its existing truck showrooms, most of which are located outside limits of most cities.

The van segment produces annual volumes of about 125,000 units, registering growth of 19 per cent, according to the Society of Indian Automobile Manufacturers. Maruti Suzuki is the market leader with a near monopoly. The Delhi-based company has a share of 92 per cent in this segment followed by Mahindra & Mahindra and Tata Motors.

Ashok Leyland Limited

Maruti Suzuki India Limited

Tata Motors