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

Ashok Ley­land banks on in­no­va­tive prod­ucts to en­hance mar­ket share Toy­ota launches Yaris at Rs 8.75 lakh Tata Ul­tra range of trucks to be a dis­rup­tive force in the mar­ket Honda launches 2nd Gen Amaze

Ashok Ley­land is bank­ing on in­no­va­tive new prod­ucts to con­tinue in the growth path. The Hin­duja Group com­pany will launch 30 new prod­ucts to im­prove its per­for­mance across light, medium and heavy seg­ments. Claim­ing to earn a price pre­mium on over 1 lakh trucks sold with ‘in­tel­li­gent’ EGR tech­nol­ogy in FY2017-18.

Vinod K. Dasari, Man­ag­ing Di­rec­tor of Ashok Ley­land said that, his vi­sion was to be in the global top 10 man­u­fac­tur­ers of trucks and top 5 man­u­fac­tur­ers of buses.

Stat­ing that the com­pany is the fourth big­gest man­u­fac­turer of buses and the thir­teenth big­gest man­u­fac­turer of trucks, Dasari de­scribed FY2017-18 as an in­ter­est­ing year. “The Supreme Court put a ban on the sale of BS III ve­hi­cles. With the ‘in­tel­li­gent’ EGR tech­nol­ogy up our sleeve, we could sup­port our chan­nel part­ners to meet the chal­lenge. We could con­vert BS III ve­hi­cles to BS IV and what­ever re­mained were ex­ported. It was painful, but we could tackle it suc­cess­fully un­like many oth­ers who had to take sig­nif­i­cant hits,” he said.

Terming FY2017-18 as a year of ag­gres­sive com­pe­ti­tion, Dasari said, “it is nec­es­sary to look at how high the mar­gins are rather than how high the dis­counts are.” The com­pany has ear­marked Rs 1000 crore for cap­i­tal ex­pen­di­ture. Hav­ing won an or­der for 10x10 high mo­bil­ity ve­hi­cles (val­ued at Rs 100 crore) to carry the Smerch Rock­ets from the Min­istry of De­fence (MoD), Gov­ern­ment of In­dia, is bank­ing on in­no­va­tive new prod­ucts that will ad­dress the chang­ing re­quire­ments of trans­porters and fleet op­er­a­toRs Ag­gres­sively bid­ding for de­fence con­tracts in­volv­ing mo­bil­ity needs of the In­dian Army, rid­ing along­side its US-based part­ner Lock­heed Mar­tin, the CV maker, won 12 out of the 15 ten­ders it par­tic­i­pated in last year.

An­nounc­ing that there was ir­ra­tional dis­count­ing and acer­bic com­pe­ti­tion against the EGR, Dasari stated, “We of­fered an in­no­va­tive prod­uct range then, and will con­tinue to do so.” Dis­play­ing 50 new elements in Chen­nai re­cently, in­clud­ing trucks, buses, de­fence ve­hi­cles, spare parts, net­work and ser­vice ini­tia­tives, telem­at­ics ini­tia­tives, gensets and pow­er­trains, Ashok Ley­land hinted at a growth strat­egy that is lim­ited not just to In­dia or just to CVs, but to a wide range of of­fer­ings, and in mar­kets out­side of In­dia like the Mid­dle East, Africa, Ukraine and Rus­sia.

Over­seas thrust

Said to have be­gun par­tic­i­pat­ing in the Euro 5 Rus­sian mar­ket with the sup­ply of Boss 1223 (with 12-tonne GVW and SCR ex­haust af­tertreat­ment) in left-hand drive form with heated cabin and heated rear view mir­rors, Ashok Ley­land dis­played (out of the 50 elements) a num­ber of left-hand drive CVs in the form of trucks and buses, un­der­lin­ing its stress on ex­ports and to gain a firm foot­ing in some of the fast grow­ing over­seas mar­kets. Some of the in­ter­est­ing left-

hand drive ve­hi­cles the com­pany show­cased were a left-hand drive Part­ner with 6500 Kg GVW, 24-seater Mitr bus, 33-seater Oys­ter air-con­di­tioned staff bus, and 47-seater Fal­con school bus with three-point seat­belts. The Fal­con and Oys­ter are made at Ashok Ley­land’s Ras Al Khaimah (RAK) fa­cil­ity in the Mid­dle East, which was es­tab­lished in 2010 as a joint ven­ture be­tween Ashok Ley­land and the Ras Al Khaimah In­vest­ment Au­thor­ity at an es­ti­mated in­vest­ment of $ 50 mil­lion, and an ini­tial ca­pac­ity to build 2000 buses and trucks.

Dou­bling up the RAK ca­pac­ity on the back of the plant cre­at­ing a new record pro­duc­tion, the com­pany is pur­su­ing its over­seas am­bi­tions by the cre­ation of the Bangladesh plant with a lo­cal part­ner to gain a lo­cal edge. Pro­duc­tion at that plant achieved record lev­els ac­cord­ing to Dasari, and the pro­duc­tion was ramped up. The new tar­get is set for 200 to 400 ve­hi­cles per week. Ashok Ley­land has in­vested in a sub­stan­tial op­er­a­tion in Dubai, and in the Ivory Coast to tap the Mid­dle East and African mar­kets. The com­pany has also in­vested in op­er­a­tions in Nepal and Kenya. The strat­egy fol­lowed is through deal­er­ships, lo­cal assem­bly plants, new prod­ucts and more.

Over 750 units of the Oys­ter have been sold in the over­seas mar­ket. The Sun­shine school bus and the Cap­tain heavy truck range has been in­tro­duced in Nepal. These ve­hi­cles, said Dasari, have been po­si­tioned at the same price as Ja­pa­nese ve­hi­cles and are con­tin­u­ing to per­form very well. Un­der the gloabl GET pro­gramme, Ashok Ley­land is investing in peo­ple. Averred Dasari, “Grad­u­ate en­gi­neers were hired from mar­kets like Ivory Coast, Kenya and Bangladesh and brought to In­dia.

Tack­ling con­straints

Faced with se­vere pro­duc­tion con­straints last year, Ashok Ley­land en­acted a sub­stan­tial change. Ex­pe­ri­enc­ing a 5x change (read growth) in the 10x2 trucks the CV maker made in the pe­riod be­tween Q1 and Q4 last year, in­flu­enced by GST, and the hub and spoke trans­porta­tion model, the com­pany sold 158, 612 units last year, mark­ing a growth of 19%, which was slightly less than the in­dus­try growth of 20%. An es­ti­mated 856453 CVs were sold last year, clock­ing a growth of 20%. Re­spond­ing to mar­ket needs by launch­ing the 3718 and 3718 Plus multi-axle rigid truck mod­els amount­ing to a 37-tonne GVW each, Ashok Ley­land made sub­stan­tial changes to the pro­duc­tion ca­pac­ity to tackle con­straints.

“We had to in­crease the ca­pac­ity overnight. The pro­duc­tion of nine­speed gear­box was quadrupuled” in­formed Dasari. Fig­ur­ing out a way to hike the pro­duc­tion of heavy trucks, Ashok Ley­land ex­pe­ri­enced a good up­swing in the North In­dian mar­kets. From 18,000 num­bers in Q1, the mar­ket rose to 43,000 by Q4. It marked a sub­stan­tial change. In ear­lier in­stances, the com­pany would lose mar­ket share when the north­ern mar­kets saw an up­swing and the south mar­kets shrunk. The same did not hap­pen, and the up­swing in north­ern mar­kets ac­tu­ally worked to the ad­van­tage of the com­pany.

Mak­ing sub­stan­tial in­vest­ment in net­work over­time, Ashok Ley­land, said Dasari, has been able to hold on to the mar­ket share of 34% be­cause of a solid growth in the north­ern mar­kets which is where we have grown our net­work. An up­swing in the north­ern mar­kets ben­e­fit­ting Ashok Ley­land, the CV OEM over the last 5 years sig­nif­i­cantly ex­panded its net­work. An in­no­va­tive strat­egy to in­clude

3S, 1S deal­er­ships and quick­ser­vice mo­tor­cy­cle mounted teams is claimed to help. Push­ing the dig­i­tal ini­tia­tives like iAlert telem­at­ics (that looks far be­yond track and trace), LeyAs­sist, LeyKart, and Ser­vice­mandi, Ashok Ley­land did its first dig­i­tal trans­ac­tion in Au­gust 2017. “Since our first dig­i­tal trans­ac­tion in Au­gust 2017, we have bridged the 50,000th trans­ac­tion mark in March 2018. Op­er­at­ing only across 3 routes, we reached in March alone a Ser­vice­mandi run rate of Rs 100 crore. We cre­ated a Rs 100 crore busi­ness in 6 months, and we are hop­ing it to be grow to Rs 500 crore next year,” said Dasari.

Mar­ket share

Claim­ing to re­tain the mar­ket­share de­spite ag­gres­sive com­pe­ti­tion and other chal­lenges, Ashok Ley­land is con­tin­ues to fo­cus on dealer prof­itabil­ity. Ini­tia­tives like Maxserve are said to have led to a sub­stan­tial im­prove­ment in dealer prof­itabil­ity as well as cus­tomer sat­is­fac­tion. “Our deal­ers were sell­ing Rs 500 crore to Rs 600 crore worth of ser­vice 2-3 years ago. The ser­vice rev­enues have dou­bled through the Maxserve in­ti­tia­tive,” said Dasari.

The other, and a big ini­tia­tive from the com­pany to ex­pand its reach as well as the mar­ket share is the in­tro­duc­tion to up to 30 new prod­ucts, in­clud­ing a 41-tonne rigid 10x2 haulage truck with a 10-tonne par­al­lel­o­gram type four-wheel (high) lift axle. Aimed at those who are look­ing for a rigid multi-axle truck with a GVW of more than 37-tonne, the 41-tonne truck, called the 4123 will be launched later this year and in­cor­po­rates a num­ber of in­no­va­tions like just 2 greas­ing points, ad­justable torque rod on the live axle, a 213cc com­pres­sor, and slip­per sus­pen­sion from Mer­i­tor.

Em­ploy­ing a uni­tised front axle, the 4123, ac­cord­ing to Dr. N Sar­a­vanan, Se­nior Vice Pres­i­dent, Prod­uct De­vel­op­ment, Ashok ley­land, of­fers higher pay­load (up to 3.8-tonne more) and is cost ef­fi­cient. “We have man­aged to en­sure higher pay­load with adding too much weight to the lift axle de­spite hav­ing to lift 4 wheels. To en­sure optimum tyre life, we have de­vel­oped a sys­tem where the lift axle slightly lift when the truck is tak­ing a turn of over 30-de­gree at slow speeds. The bel­lows au­to­mat­i­cally de­flate to en­sure this.”

Hav­ing higher pay­load and lower main­te­nance model, ac­cord­ing to Dr. Sar­vanan, the 4123 comes with a fully-built cabin, and is easy to ma­noeu­vre. Terming the In­dian mar­ket as weird when asked if a 40-tonne prime mover trailer com­bi­na­tion will make more eco­nomic sense than to have such a rigid truck, he said, “The trac­tor-trailer mar­ket is evolv­ing, and will take some time to gain in ef­fi­ciency.”

In the area of gas pro­pelled CVs, Dr Sar­a­vanan said, “At some point elec­tric CVs may not make sense from a pay­load point of view. On a 25-tonne ve­hi­cle for ex­am­ple, the bat­tery ca­pac­ity is so high that a sig­nif­i­cant amount of pay­load will be lost. The thought process in CVs there­fore is to have elec­tric and other propul­sion sys­tems like fu­ell cell, LNG, CNG, or diesel. LNG or CNG can be had as a stand­alone propul­sion medium too. The chal­lenge is in the sup­ply chain.”

With the move to EuroVI, CVs will be­come cleaner than CNG with­out hav­ing to deal with the chal­lenges as­so­ci­ated with it. Ashok Ley­land could look at LNG bus ap­pli­ca­tions, he said. As far as the 4123 10x2 truck is con­cerned, Dr. Sar­a­vanan is hop­ing for a shift from 37-tonnes, and from 40-tonne trac­tor-trailer seg­ment in ap­pli­ca­tions like ce­ment, to the 4123 be­cause of the higher pay­load ad­van­tage it of­fers.

Ashok Ley­land is ag­gres­sively bid­ding for de­fence con­tracts in­volv­ing mo­bil­ity needs of the In­dian Army

Vinod K. Dasari, MD, Ashok Ley­land, is pur­su­ing a vi­sion to be in the global top 10 truck mak­ers, and in the top 5 bus mak­ers

Ashok Ley­land dis­played the Guru 1010, and hinted at a grow­ing fo­cus on light and in­ter­me­di­ate CVs

Dr N. Sar­a­vanan, Se­nior Vice Pres­i­dent, Prod­uct De­vel­op­ment, Ashok Ley­land, is con­fi­dent of the 41-tonne truck align­ing well with the higher ton­nage shift in haulage seg­ments like ce­ment

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