Premium| Listen to this article |
Hinduja Group-led automotive manufacturer, Ashok Leyland is prepping to enter the used commercial vehicles business. The company has entered into an MoU with Mahindra First Choice Wheels.
Mahindra First Choice Wheels is the largest used car retailing network in India.
Sanjeev Kumar, Head - MHCV at Ashok Leyland said, "It is a great moment for us on this association of Ashok Leyland with MFCW to provide larger options to our customers with the combined strength of our knowledge in CV and MFCW strength on the yards, digital ecosystem. We believe this relationship will provide enhanced value to our customers," reported PTI.
Through this deal, Ashok Leyland seeks to streamline the used vehicles market by leveraging its digital ecosystem, its existing and potential channel partners for physical interactions in over 700 parking yards spread across India, and other advanced technologies.
Ashok Leyland in a statement mentioned that through facilities like an exchange, disposal, hybrid, and special vehicle inspection, the platform aims to become the first choice amongst the customers considering an exchange of their vehicles.
Also, the company highlighted that through effective and efficient processes, it will bring more transparency into this space, thereby increasing options to reduce the number of old vehicles plying across the roadways of the country.
The deal is expected to create an opportunity for Ashok Leyland to reach as many fleets and single truck owners across India.
At present, the pre-owned or re-purposed vehicles sector is experiencing exponential and consistent growth since the beginning of the pandemic due to the increase in the waiting period for vehicles and financial challenges.
Between April to March 2022 (FY22), Ashok Leyland's total sales stood at 1,28,326 units rising by 27% from 1,00,715 units recorded in the previous fiscal. Of the total, domestic sales were at 1,17,312 units higher by 27% from 92,714 units in FY21.
On Monday, Ashok Leyland shares closed at ₹127.55 apiece flat compared to the previous closing on BSE. At the current price, the company's market valuation is ₹37,442.65 crore.