Ashok Leyland has confirmed that it is fully equipped to meet the upcoming regulation mandating air-conditioned (AC) cabins in all medium and heavy commercial vehicles (M&HCVs). Sanjeev Kumar, President and Head of M&HCV at Ashok Leyland, stated that all of the company’s manufacturing units are currently producing AC cabin vehicles.
Ahead of Schedule for October 2025 Deadline
The Chennai-based commercial vehicle manufacturer, which produces the AVTR and BOSS truck series, is among the few OEMs already aligned with the October 2025 deadline, extended from the earlier January 2025 proposal. The phased rollout, approved by Union Minister Nitin Gadkari in July 2023, has allowed industry players sufficient time for preparation.
Regulation to Raise Vehicle Prices Slightly
The AC cabin mandate will apply to trucks with a gross vehicle weight of 7.5 to 55 tonnes. While the rule is expected to increase vehicle prices by 1–1.5%, Kumar believes the market is mature enough to absorb the cost increase. He noted that even before the mandate, AC penetration in tractor-trailers and tippers was already at 15–20%, with mining trucks leading in early adoption.
Financing Sector Ready to Support Shift
Kumar highlighted that NBFCs and other financing institutions have adjusted their loan offerings to accommodate the slight rise in cost, reducing the financial burden on buyers.
Options Beyond Basic Compliance
Ashok Leyland also plans to go beyond the basic regulatory requirements. The company is working on offering performance AC systems and HVAC units as options. These systems, common in passenger vehicles, include heating functions and will ensure driver comfort across different climates, including extremely cold conditions.
Industry Outlook for FY26: Cautious Optimism
Kumar acknowledged a 3% degrowth in FY25, calling it a minor decline compared to past market cycles. However, he expressed optimism for FY26, projecting low single-digit positive growth, backed by government infrastructure spending, strong e-commerce demand, and revival in core sectors like cement and steel.
He also noted that while Q2 of FY25 saw a slowdown in road construction, activity picked up significantly in Q4, resulting in strong demand for tippers. The trend appears to be continuing in the first two months of FY26, with post-monsoon growth expected to accelerate.
Bus Segment and Public Orders Driving Passenger Vehicle Demand
In the commercial passenger segment, demand for buses has remained steady, especially for school and staff transportation. Kumar expects 3–5% growth in the segment this year, driven by a post-COVID demand backlog and strong order visibility from state transport undertakings.
RBI Rate Cut May Boost Market Sentiment
The recent interest rate cut by the Reserve Bank of India is expected to positively impact the industry by reducing ownership costs. Kumar sees this move as a major positive, likely to improve customer buying sentiment.
Confident Road Ahead
With a clear regulatory framework, full manufacturing readiness, supportive financing, and favorable economic trends, Ashok Leyland enters FY26 with a balanced yet confident outlook on both goods and passenger vehicle segments.
