Ashok Ley­land on growth mode, to fo­cus on exports

Auto components India - - CONTENTS - Story by: Bhushan Mhapralkar

As the In­dian mar­ket is be­com­ing more cycli­cal off late, Ashok Ley­land, the ninth largest truck maker and fourth largest bus maker in the world, is look­ing at in­creas­ing its exports, es­pe­cially to the Mid­dle East, SAARC, and African mar­kets. It is also look­ing at Rus­sia, Ukraine and Latin Amer­ica.

Ra­jive Sa­haria, Pres­i­dent, Global Sales and Dis­tri­bu­tion, Ashok Ley­land said that the com­pany plans to ex­port 1 CV for ev­ery 2 CVs sold in the do­mes­tic mar­ket. For buses the do­mes­tic and ex­port sales ra­tio is 58:42, T Venkatara­man, Se­nior Vice Pres­i­dent, Global Buses, Ashok Ley­land said. “We are sup­ply­ing Euro 5 ve­hi­cles to Ukraine, and to Latin Amer­ica,” he said. Sup­ply of bus kits to Ukraine is on. The lo­cal con­vert­ers build bod­ies on them.

Sa­haria said that more trucks were sold over­seas last year than buses. “Close to 60% of ex­port sales was through trucks,” he said. As part of its strat­egy to averse risk and grow faster than the in­dus­try, Ashok Ley­land ex­ited from some of the STU busi­ness ow­ing to “low prof­itabil­ity,” Vinod K Dasari, Man­ag­ing Di­rec­tor and CEO, Ashok Ley­land said. Ashok Ley­land has, mean­while, di­ver­si­fied to in­no­va­tive prod­ucts like Cap­tain, Guru, Cir­cuit elec­tric bus, Sun­shine school bus with roll-over pro­tec­tion, and the Oys­ter (safest) school bus in the Gulf. Since its launch the com­pany has sold over 3000 Sun­shine school buses. There is a wait­ing list of 500 ve­hi­cles.

De­spite a sin­gle prod­uct (Dost), Ashok Ley­land’s LCV port­fo­lio, said Dasari, wit­nessed a growth of 4%. Ac­cord­ing to Nitin Seth, Pres­i­dent, LCV and De­fence, “We are now look­ing at run­ning faster. We will launch the pas­sen­ger ver­sion of Dost fol­lowed by the big­ger ver­sion of

Dost called the Dost+. An eight-me­tre long bus on the Mitr plat­form will be in­tro­duced. We will also ad­dress the de­mand for 32-seater school bus and a CNG ve­hi­cle. These would be de­vel­oped in left-hand drive vari­ants as well by keep­ing in mind the ex­port mar­kets.” Ashok Ley­land is keen to tap world’s 80% LCV mar­ket that is left­hand drive-ori­ented. To cater to the mar­ket for smaller buses, the left-hand drive Mitr will be its trump card.

Apart from ex­pand­ing the 3 LCV plat­forms the com­pany cur­rently has, the plan, ac­cord­ing to Seth, is to de­velop new LCV plat­forms by 20192020. Well aware of the do­mes­tic LCV mar­ket turn­ing eight-per cent pos­i­tive for the first time this year, Seth is look­ing at hit­ting a six-lakh vol­ume by 2021. He hopes LCV will be a big­ger player with the com­ing of GST.

In the ex­port mar­kets, Seth is keen to lever­age the fact that Nissan LCVs were present in many mar­kets. Fill­ing up the gaps in the LCV prod­uct port­fo­lio by de­vel­op­ing new plat­forms, Ashok Ley­land is look­ing at qua­dru­pling the sale of LCVs, with the Nissan joint ven­ture be­hind it. Ashok Ley­land is bank­ing on Dost+, which of­fers a 1400 kg ca­pac­ity and rides on 15-inch dia. Wheels, to fur­ther in­crease its LCV mar­ket share in the near fu­ture. The Dost+ comes equipped with six leaf spring sus­pen­sion at the rear, and a fourleaf spring sus­pen­sion at the front.

Ow­ing to its growth po­ten­tial, Ashok Ley­land paid at­ten­tion to the coal tip­per and con­struc­tion truck mar­ket. There has been good up­take in 10x2 and 8x2 min­ing tip­pers and con­struc­tion trucks. It sold over 1500 units ac­cord­ing to Dasari. The share of Ashok Ley­land’s min­ing tip­per and con­struc­tion truck mar­ket grew 50% over the in­dus­try av­er­age of 30%, he said.

De­fence busi­ness

Pro­vid­ing fur­ther im­pe­tus to its de­fence strat­egy, the sup­ply of Stal­lion ve­hi­cle kits grew 7.4%, from 3076 to 3304 units. In or­der to cater to 25% of the De­fence bud­get, Ashok Ley­land has in­vested in a new de­fence ve­hi­cle fa­cil­ity at its En­nore plant. Ac­cord­ing to Dasari, close to 95% of the UN peace keep­ing force in Africa use Ashok Ley­land ve­hi­cles. The com­pany has re­ceived 4x4 mine pro­tected ve­hi­cle or­der from the In­dian Army, he said.

Con­sis­tent growh

Ac­cord­ing to Dasari, the mar­ket share of Ashok Ley­land grew from 24% to 32%. Gopal Ma­hade­van, Chief Fi­nan­cial Of­fi­cer, Ashok Ley­land, said, “We are at­tribut­ing growth to ad­dress­ing the ex­act needs of the mar­ket. We are the only man­u­fac­turer to in­crease the price of our prod­ucts in Jan­uary 2017 by 4%. We are also the only one to gain max­i­mum mar­ket share in March 2017.”

Of the view that they have seen good growth de­spite hik­ing prod­uct prices, Ma­hade­van said, “the solutions we of­fer are about to­tal cost of own­er­ship. Work­ing on mul­ti­ple chan­nels, Ashok Ley­land in­creased its points of pres­ence from 50 to 1,600. Putting money on chan­nel ex­pan­sion rather than dis­counts, the com­pany con­cen­trated on ef­fi­cient break­down ser­vices. This was nec­es­sary be­cause the ve­hi­cles we sell are of­ten mis­used, and are there­fore prone to a break­down.”

Apart from in­vest­ing in the chan­nel, Ashok Ley­land has also in­vested in new prod­ucts. The Boss, Cap­tain, Part­ner, Jan­bus, Mitr, Guru, and oth­ers are ex­am­ples. The com­pany lever­aged tech­nol­ogy to ad­dress the re­quire­ments of the cus­tomers at any given time. There is a clear fo­cus on re­turn on in­vest­ment at Ashok Ley­land when it comes to tech­nol­ogy. Ma­hade­van said, “As far as tech­nol­ogy is con­cerned, ours is the only elec­tric bus that climbed the Ro­htang pass with­out a break­down.”

Digi­ti­sa­tion

Ashok Ley­land is build­ing its ca­pa­bil­i­ties in par­al­lel. It is digi­tis­ing. Digi­ti­sa­tion for Ashok Ley­land, apart from com­mon­rail en­gines, means telem­at­ics and a slew of ‘sup­port’ tech­nolo­gies. Dasari said, “We have de­vel­oped a new way of pro­vid­ing telem­at­ics in the form of a sin­gle de­vice that works on any Ashok Ley­land ve­hi­cle, and with­out any kind of en­gine or as­so­ci­ated ar­chi­tec­ture. It pro­vides driver in­for­ma­tion, di­ag­nos­tics, etc., and is found on BSIV CVs.”

Ashok Ley­land has de­vel­oped a scan tool for on­board di­ag­nos­tics for a frac­tion of a cost, and sans the need for a lap­top. The com­pany has also de­vel­oped Ley As­sist, which ac­cord­ing to Dasari is a Blue­tooth­op­er­ated phone-based tool to di­ag­nose er­ror with­out any phys­i­cal con­nec­tion. Look­ing at au­ton­o­mous ve­hi­cles and ve­hi­cle pla­toon tech­nolo­gies as the fu­ture, Ashok Ley­land is work­ing in that di­rec­tion, though with lim­ited re­sources.

Ma­hade­van said, “I have lim­ited Dol­lars, and I am spend­ing them ef­fi­ciently. Our net price re­al­i­sa­tion in March was bet­ter than in Fe­bru­ary, and it is some­thing that is hard to be­lieve but true,” he added.

Vinod K. Dasari, MD & CEO, Ashok Ley­land

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