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Ashok Leyland
Ashok Leyland, the leader in commercial vehicle manufacturing in the country, is now moving into the manufacture of CNG propelled buses in the country. It is also planning an aggressive foray into the north Indian markets.
The 50-year-old, Rs 3,000-crores flagship of the Hinduja group has already put four lakh vehicles on Indian roads and is now all set to floor the Indian market with a clutch of new initiatives, says R Seshasayee, Managing Director, in an exclusive interview to Sify.com
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Excerpts from the interview:
You have identified expansion in the North Indian markets as one of your focus areas. How are you going about it?
Given the good market acceptance for our products, it was only natural that we launch a concerted program for stepping up geographical coverage. Already, we enjoy a 25 per cent market share in North's Medium Duty Vehicle (MDV) segment. The Northern market also contributes around 25 per cent of our volumes.
We would have achieved a fair degree of consolidation by end of this year. For example, the 32-strong dealer network will grow to 40-plus in the region during the current financial year. Also, a 50 per cent increase is planned in Authorised Service Centres, which now number 42. A 30 per cent expansion in parts outlets is also planned. Our target is to have a service point every 100 km of the region by next year.
What is your vision for the company? Despite your rich experience in the Indian market, why do you hesitate to enter the passenger car segment?
It is our vision to be a full range commercial vehicle manufacturer, servicing domestic and a significant part of the export markets. We will seek this growth through customer orientation and increasing focus on our technology capabilities.
Commercial vehicles are capital goods unlike cars. In terms of vehicle platforms, too, they are mutually exclusive. We had evaluated our prospects in the car segment and decided on being a focused commercial vehicle manufacturer. With world markets opening up and Indian technology moving forward, we have enough headroom for growth in this segment itself.
The concept of CNG operated buses has not taken off in a big way. Is there a need for stricter pollution norms for the shift to CNG powered vehicles? Are new investments a stumbling block?
CNG-driven vehicles are a location-specific, eco-friendly answer that can be applied only where CNG is available. Therefore, currently CNG buses are restricted to Mumbai and the National Capital Region (NCR). At around 6,000, the requirement of CNG buses in NCR is fully met.
The third pocket of CNG availability is along the HBJ pipeline. We have mooted the introduction of this technology in Gujarat's major cities.
Availability of CNG and not the emission laws will determine usage of this technology. Now that the Indian automobile manufacturers have developed the requisite vehicle technology, the immediate requirement is for creating gas filling stations in locations where the gas is available.
You export vehicles mostly to SAARC countries. What is your export growth plans for other regions?
Apart from the SAARC countries, which constitute a major export market, the company has significant presence in the Middle East, Egypt, Mauritius, South Africa, eastern and western African nations. Last year, we achieved a breakthrough in Afghanistan and Seychelles.
We have on hand the initial order for over 3,000 vehicles to be supplied to Iraq under the UN-approved 'food for oil' program.
Export thrust was an important component of the long-term corporate plan we drew up in the early 90s, ahead of economic reforms. This followed the entry of the Hinduja Group and IVECO as principal shareholders in 1987 and their commitment to back the company's growth plan.
Summarised as "global standards, global markets", the plan envisaged attaining global standards of product and production technology as also quality so that we could become a global player.
Accordingly, in the last fifteen years we have invested in international class manufacturing facilities, through a number of collaborations with technology leaders. We now have contemporary aggregate technology, the latest instance being the high-powered 'J' series engines. This is the first time Hino Motors has licensed production of this contemporary engine series outside Japan.
Every progression in emission standards and performance parameters in our products open up new markets for them. We expect an annual double-digit growth in exports to current markets even as we seek to enter new markets. We are closely studying prospects in Latin American countries and are keen on consolidating our operations in South Africa.
What are the company prospects in the current year?
The commercial vehicle industry is in the midst of a boom phase. Total industry volumes in MDV segment has grown 18.74 per cent in the first quarter of the current fiscal. July has seen further demand expansion. We anticipate a volume growth of around 15 per cent over the full year.
We plan to launch 23 new models and variants by the end of this fiscal, forming part of our current range renewal program. Some of these would conform to the Bharat Stage II norms being progressively implemented in different parts of the country.
The 'E-Comet' range with a 9-15 tonne capacity is slated for a rollout during October this year. Also on the anvil are a 16T Hino variant, a 160-HP multi-axle and 160 HP tractor-trailer. Besides, the initial batch of vehicles fitted with the powerful 260 hp 'J' series engine would be ready for launch by the year-end.
Foreign companies are now all over the Indian market. Is there a need for a level playing field to bolster Indian industry?
It is already a level playing field for companies setting up shop in India. Even in the case of imports, entry barriers in commercial vehicle industry are among the lowest, with tariff at half that of cars. However, on the global plane, things are different.
Though the Indian industry, in the last few years especially, has gained considerably in internal efficiencies, in terms of external factors such as cost of finance, infrastructure and labour legislation, we have a long way to go for parity with the developed world.
'Swadeshi' as an insular idea has run out of steam. 'Swadeshi', to denote optimizing the country's capabilities with international collaborations if required, to further the country's economic development for the welfare of its citizens, is ever valid.
What is your take on the process of government deregulation?
The fact is, the environment in which Indian business operates today has changed dramatically compared to, say, in 1990. For one thing, running a business is no more Delhi-centric. It is true that counter pulls in a democratic system tend to retard the process of reforms. At the same time, the phased nature of change has allowed most sectors to adapt to transition. We have not seen anything like a collapse of an industrial sector in India.
How has the Internet effected the way you run your industry? Has there been an impact?
Internet has made it possible to obtain information instantaneously and inexpensively. Today, information has no distance barrier. It has hastened the communication processes, thereby changing the business biorhythm itself.
In the area of corporate governance, it is an information window and an important and inexpensive tool for corporate transparency. Internet has influenced our material and technology sourcing processes, and brought down costs.
Ashok Leyland uses the power of this medium for both e-procurement and e-disposal. Equally, or even more significant has been its impact on employee awareness and outlook.
Would you like to be described as net-savvy?
Reasonably net-savvy.
P C Vinoj Kumar |
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