The diesel price hikes have had an impact on demand initially but have now stabilised, Ashok Leyland President MHCV, Sanjeev Kumar, told.
“First half growth will be better, but when it comes to the second half, because of the base effect, growth percentage is lower. Overall, it should be single-digit growth,” he said.
Kumar was responding to a query on the growth outlook for the ongoing fiscal for the commercial vehicles industry.
In the first two months of the fiscal, there were challenges, and then there was improved market sentiment in June, he added.
“Now we are again seeing some challenges. Having said that, overall we are optimistic…,” Kumar noted.
The overall expectation is that the market continues to be good, he said, adding, “we are hopeful that the second quarter should be better than last year’s second quarter.”Asked about the impact of diesel price hike on CV demand, he said, “When we look at our customers and Indian market, they look for certainty rather than volatility of diesel prices. Whatever the government was supposed to do, they have increased the prices, so there is stability.”
The market will take some time to get adjusted to that and then move on, Kumar said.
Fuel price hikes do have some impact for at least a month or two, he said, adding that after that, customers will pass on price hikes to their respective customers, helped by market growth.
On rising input costs, Kumar said, “We are seeing how do we manage this current situation, but yes, we are hopeful that at some point of time those costs will start coming down.”
On price hikes of products, Kumar said, “At present we do have a channel, but having said that, it is very difficult for us to pass on the costs because it will disrupt the overall industry.”
Passing on those costs will be a real challenge, he noted.