Hyderabad, September 25: Despite spiralling interest rates and fears of a double dip recession, the growth of light commercial vehicles (LCVs) is likely to remain robust during the current fiscal, according to V Sumantran, executive vicepresident of Hinduja Automotive Ltd and chairman of Nissan Ashok Leyland Powertrain Ltd.
“LCV is one of the few segments that registered a growth during the 20082009 economic recession while others, including passenger vehicles, recorded a dip. It is estimated that LCV sales will touch the 5 lakh figure by 2015 from the current 3.80 lakh.” Sumantran said.
Speaking to the media after unveiling Dost, an LCV produced in partnership with Japanbased Nissan Motor Company, he said the company was facing a pricing pressure due to an increase in the costs of raw material such as steel.
Saboo Auto Zone _ an exclusive outlet for Ashok Leyland, which is part of the $2.5 billion Hinduja Group _ was inaugurated near Uppal on Saturday. The 50,000 sft facility will have a sales force of over 32 besides a service staff of about 15. “This will be a sales, service and support centre for Ashok Leyland. In the first phase, we plan to set up two or three more facilities within the city over the next few months. Gradually, we will spread to other locations including tierII and tierIII cities,” said Nand Kishore Patel, CEO, Saboo Auto Zone.
According to Patel, they aim to sell 100 LCVs this month itself considering the festive season ahead. “There is no dearth of demand for commercial vehicles unlike for passenger cars. And, the rising interest rates will not deter prospective customers as commercial vehicles already have a higher interest slab and banks do not increase interest rates every time there’s a hike,” he explained.
Current bank interests range between 14 and 20 pc on loans for commercial vehicles as opposed to 11 to 12 pc on passenger vehicles. Interestingly, interest rates on loans for commercial vehicles were revised last year while the rates on passenger vehicles were revised more than six times this year.
–Agencies