Ashok Leyland stops production of Stile MPV

Following a lacklustre market response to its seven-seater Stile MPV, Ashok Leyland has discontinued production of the vehicle. 

Launched on October 7, 2013, the Stile was the second product after the Dost SCV from the Ashok Leyland-Nissan Motor joint venture in the light commercial vehicle business. The Stile sold a total of only 1,154 units since launch. This comprises 776 units in 2013-14, 346 units in 2014-15 and 32 units in April 2015. 

At launch, the Stile had a starting price of Rs 7.49 lakh (ex-showroom Delhi) for the basic AC and electric power steering option, and was sold through 130 outlets across the country. 

In the goods carrier segment, the Dost is the most successful product in the 2.5-tonne category and the company was looking to achieve similar success in the passenger carrier segment. However, the Stile fell short of its expectations.

According to Vinod K Dasari, managing director, Ashok Leyland, “The Stile was not performing up to the expectation and we have decided to discontinue the products and instead focus on the goods carrier segment. The Dost is doing really good for us in the LCV segment and we will roll out more variants.”  The company has also written down the investment of Rs 224 crore in the joint venture.

Being the fourth largest global player in the bus segment, the company wants to leverage its position by expanding capacities. According to Dasari, the company is looking to set up a smaller bus plant this fiscal with assembly capabilities in the Middle East, Africa and India with an investment of Rs 20-25 crore in each plant.

Meanwhile riding on the better performance of the medium and heavy commercial vehicle (M&HCV) segment, Ashok Leyland posted revenues of Rs 13,562 crore in FY2014-15 as against Rs 9,943 crore in FY2013-14. Net profit was Rs 335 crore in FY2014-15 against Rs 29.38 crore in the previous fiscal.

The company’s improved performance has come about by increasing volumes, higher average price realisation, cost cutting measures and a superior product mix. Its market share in the M&HCV segment is also up with total domestic sales of 66,442 units on back of good sales of its HCV range including the 3718, Captain, Boss and JanBus.

The total domestic industry volume for the M&HCV segment was 230,000 units in FY2014-15, up 16 percent over the previous fiscal, but still lags behind the 350,000 unit level of FY’12.

Dasari expects FY’16 will be better for the CV industry with an expected growth of 10-12 percent and Ashok Leyland maintaining similar growth.

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