The market for medium and heavy commercial vehicles has witnessed intense competition, which lead to an unsavoury scenario between competitors. Ashok Leyland, the country's No. 2 truck manufacturer, has attributed its market share loss to high discounts by counterparts and lending practices in the industry. On 16th July, the company, a flagship of the Hinduja Group, announced a loss of Rs. 142 crore in the first quarter, which is its biggest ever in the period. Ashok Leyland also dropped the 3 percentage points in terms of market share, which it had gained in fiscal 2013.
In the first quarter, the auto maker's market share has dropped down to 29 per cent from 32 per cent, in fiscal 2013. At the same time, Tata Motors, the leader in the market for medium and heavy commercial vehicles, rejoices with a share of 60 per cent. During an earnings call that took place on the 17th of July, Vinod Dasari, the Managing Director of Ashok Leyland, explained the reasons why the company's performance had declined. He blamed the captive finance arms of competitors for providing loans without any collaterals as one of the reasons.
“Some of these captive arms are running KYC schemes, where they are lending without taking any collateral. This is going to hurt in the long run,” said Dasari. However, Dasari was pretty confident of making a comeback as he expected the practice of giving large discounts to be stopped soon.
