Ashok Leyland booked turnover of INR24.6bn (US$212m) for the first fiscal quarter ended 30 June, 2013 compared with INR30.3bn ($518m) the previous fiscal year.
“Various cost control measures have helped the company remain positive on the EBIDTA front,” the Hinduja Group commercial vehicle maker said in a statement.
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“Although the entire commercial vehicle industry has had a very tough quarter one, we, at Ashok Leyland, have remained focused on being future-ready by staying committed to our product development, network expansion and cost control programmes,” said managing director Vinod Dasari.
“What we are experiencing is one of the harshest and steepest of downturns and while we are combating it, the situation also affords us an opportunity to streamline our processes towards becoming a leaner and far more customer-oriented organisation.”
Vehicle sales in the quarter fell 25.2% to 14,900 with domestic volume at 12,960 . Sales of the Dost small commercial vehicle slipped to 6,824 from 7,248 with exports of 1,940 versus 2,904.
The operating loss was INR719m ($12m) compared with profit of INR1.5bn ($25.3m) a year earlier. Apart from a drop in volumes, heavier discounting of vehicles to compete in the marketplace further eroded profits.
Ashok Leyland booked a net loss of INR1.4bn ($23.5m) compared with a net profit of INR669m ($11.2m) the previous year.
To address the tough conditions expected to last for this fiscal year, Ashok is trying to reduce its break even point. Manufacturing is being rationalized to improve asset use, debt reduction is under way and steps have been taken to reduce operational expenses.
Dasari said: “Although the market is still very volatile there are some green shoots showing. However, while we cannot control the market, we are focused on preparing ourselves for a revival which is bound to come hopefully sooner rather than later.”
Several new vehicle models are scheduled for launch.
