India's second largest truck manufacturer, Ashok Leyland, expects the medium and heavy commercial vehicle (M&HCV) industry to grow by 5-7% this financial year, supported by fleet replacement demand, infrastructure spending and private capital expenditure, even as it evaluates expanding its newly introduced air suspension technology across more truck platforms.

Sanjeev Kumar, President - M&HCV, Ashok Leyland, said demand had improved after an encouraging first quarter, with replacement purchases emerging as the biggest driver for the commercial vehicle industry.

"Quarter 1 was very encouraging. We had some tailwinds in the beginning, but June onwards things settled and the market has really picked up. We are quite hopeful that even the second quarter should be better than last year's second quarter," Kumar said on the sidelines of the launch of the company's AVTR heavy truck range equipped with air suspension.

On the industry's outlook, he added, "Overall, I feel that we are looking at single-digit growth. Very difficult to give you a number, but yes, around 5 to 7%," referring to the M&HCV and bus segments.

According to Kumar, fleet replacement is expected to remain the primary growth driver after demand improved following GST rationalisation.

"A major growth driver last year was the market change after GST got rationalised. A lot of customers who were waiting to replace their existing fleet came forward. Overall fleet age is very high right now in the CV industry and it calls for replacing that old fleet. Construction is doing very well, the government is spending money on infrastructure and private capex is also growing," he said.

He further added that exports, which had faced disruption due to the West Asia conflict, largely returned to normal in June.

Air suspension for higher payloads

The company recently also introduced a new range of AVTR heavy trucks equipped with air suspension, targeting the gap between 42-ton and 49-ton gross vehicle weight (GVW) rigid trucks.

Under current regulations, multi-axle rigid trucks are permitted a maximum GVW of 49 tons, but Kumar said customers previously had limited options between 42-ton and 49-ton configurations.
"There was a huge gap. Traditionally you would find our multi-axle trucks offering 42-ton or 49-ton GVW. We worked on those gaps with this air suspension range," he said.

The new platform enables Ashok Leyland to offer 46-ton trucks using the same tyre configuration as existing 42-ton models.

"That is where a 4-ton advantage is available to us now. Four tons is a huge advantage for any customer, any business. If you convert that into money, it is almost Rs. 500,000 (US$ 5,190)," Kumar said.

He further added that the additional earning potential could be around Rs. 3 million over a six-year financing period, compared with an estimated purchase price premium of 3 to 4% over comparable conventional trucks.

"Ultimately it is not the cost of the truck. Ultimately it is whether it makes economic sense for you to buy a truck which will increase your revenue, and in the end your profit should grow," he ntoted.

Explaining the technology, Kumar said the higher payload is enabled under existing Automotive Research Association of India (ARAI) regulations, which permit increased payload for vehicles fitted with air suspension. Responding to concerns about durability, he said the platform had undergone four years of development and extensive validation.

"Our product development team has worked for the last four years in creating this. These vehicles have gone through more than 200,000-300,000 kilometres of trials. It is a tried and tested vehicle," he said.

Kumar further added that the system has been designed by the company's engineering team and is 100% localised. Ashok Leyland is also evaluating the possibility of extending the air suspension technology to more truck platforms, based on the customer feedback.

Kumar, however, clarified that future expansion would depend on whether different truck configurations offered sufficient payload gains within existing regulatory limits. Managing Director and Chief Executive Officer Shenu Agarwal said the company's product development strategy continues to focus on technology-led innovation centred on customer requirements.

"True innovation happens when technology is at the forefront and the customer is at the centre," Agarwal said, adding that the company has introduced several new technologies in the commercial vehicle segment over the years.