Commercial vehicle maker SML Isuzu today announced it will hike prices of its products including trucks and buses by 2 to 5 per cent from next month, citing rising input cost.
Despite sluggish market, the company also said it will foray into higher capacity truck segment category by rolling out 13 tonne capacity vehicle.
The company said it plans to launch more trucks with bigger capacities in future to mark its presence.
The company, which is in light and medium commercial vehicle segment, today launched ‘Super 12.9 XM’ truck with payload of 8,500 kgs having a price range of Rs 13 lakh.
Prior to this launch, the company was present in 5 to 10 tonne capacity of trucks with 16 per cent overall market share.
"Prices increase is inevitable but we try to contain as much as possible..the range of price increase will be 2 to 5 per cent from next month," SML Isuzu Limited GM (Marketing), Anuj Sethi told PTI here.
The company has trucks in the price range of Rs 6 lakh to Rs 13 lakh while (small) buses are priced at Rs 8 lakh to Rs 15 lakh. Its luxury buses price range starts from Rs 37 lakh.
Asked about venturing into higher capacity segment in commercial vehicles, company’s MD & CEO, Eiichi Seto said, "We are now looking to expand our product range. Today’s product is 13 tonne truck and we have also plans to increase our product range."
The market for 13 tonne truck is estimated to be around 35,000 to 40,000 units per annum and the company expects to have 25 per cent market share in this segment in next few years.
"We would like to have market share of 25 per cent in this segment in 4-5 years," said Sethi.
Sethi said that the company would also like to enter higher capacity segment including 16 tonne and 25 tonne in trucks in future. "We want to launch trucks in 16 tonne and 25 tonne capacity where we do not have presence," he added.
However, Sethi said the commercial vehicle segment with market size of 4 lakh vehicles per annum has not performed well in current fiscal with general slowdown and rising interest rates badly affecting its market.
"As of now, commercial vehicle segment (in the country) is sluggish...there is no growth this year..(rather) there is a degrowth of 10 per cent this year", he said adding that the commercial vehicle segment had grown at cumulative growth of 5 per cent in last five years.
Sethi said, "in the coming year, the market should grow by 5-10 per cent as we expect economy should improve next year."
Following the market trend, SML Isuzu is also expecting degrowth in its annual sales to 10,000 units by end of current fiscal as against topline of 11,000 units in last fiscal.
SML Isuzu has production facility at Ropar in Punjab with installed capacity of 18,000 chassis per annum.
SML Isuzu which has also presence in luxury bus segment is also planning to launch a new bus with front engine in next March, aimed to target tourism.
"Tourist segment has been fluctuating...there has been dull period of 6 months...but of late we have seen some growth. Now foreign travellers have stated coming in," said Sethi.
In order to penetrate into the market, SML Isuzu has also decided to add 30 more dealers in current fiscal. Currently, the company has 106 dealers with southern and northerns parts being its potential market.
Japanese companies Sumitomo Corporation and Isuzu Motors hold 44 per cent and 15 per cent stake respectively in SML Isuzu.