Shares of Ashok Leyland slumped over 6 per cent to Rs 61.50 intra-day on the BSE on Wednesday after the company reported a 70 per cent drop in medium- and heavy-duty commercial vehicles (M&HCV) truck sales in the domestic market during August.
The company sold 3,336 units of M&HCV trucks in August as compared to 11,135 units, a year ago. Total sales of M&HCVs, including buses, dropped by 63 per cent to 4,585 units from 12,420 units in the previous year.
The sales of light commercial vehicle fell 12 per cent to 3,711 units in August 2019 from 4,208 units in the year-ago period. Total vehicle sales, including all these categories, declined 50 per cent to 8,296 units from 16,628 units in August, last year.
Transporters — struggling with excess capacity owing to a slowing economy and consumption slowdown — deferred purchases, the monthly sales data released by truck makers shows.
Companies are now hinging their hopes on the festive season and a pre-buying ahead of the implementation of BSVI emission norms, which takes effect on April 1, 2020.
But not everyone is hopeful. "The truck industry is in a very poor condition. It’s a desperate situation. Discounts of Rs 8,00,000 to Rs 9,00,000 are unheard of. Don’t think sales will improve unless consumption revives and the economy improves,” said Rajan Wadhera, president of the Society of Indian Automobile Manufacturers (Siam).
At 10:50 AM, the stock was down 5.66 per cent at Rs 61.65 as compared to a 0.3 per cent fall in the benchmark S&P BSE Sensex. The counter witnessed huge trading volumes with a combined 18 million shares changing hands on the NSE and BSE, till the time of writing this report. Nifty Auto index was the top loser among Nifty sectoral indices and was trading 1.77 lower at 6,780 levels.