Ashok Leyland bets on innovative products for domestic market

The Hinduja flagship company is bullish about the market over the next few years on the back of infra spending, pre-buys for Euro 6 and the BSVI emission norms coming into effect by 2020. 

Ashok Leyland CEO and MD Vinod K Dasari said the company had warded off many “painful” challenges including GST and the Supreme Court order directing the ban on the sale of BS3 vehicles. 

Aggressive and ‘acerbic’ competition, negative campaigning on its Intelligent Exhaust Gas Recirculation (iEGR) for BS-IV engines, irrational discounting had been handled by a superior performance and a substantial change in the product mix, he said at its annual global conference 2018 held here. 

Rather than the number of vehicles, the company’s performance has been good owing to the type of vehicles produced by it. 

Ashok Leyland clocked a turnover of around Rs 25,000 crore during the last fiscal, up from around Rs 20,000 crore in the fiscal preceding that though the volumes have not gone up, he sought to point out. The market is also shifting from low tonnage vehicles to higher tonnage ones. While the company’s focus too is on the latter segment, the light commercial vehicles (LCV) had done well. 

Apart from last year growth of 10 per cent, the LCVs had managed to turn around to post positive margins. Dasari also said he believed in the concept of ‘Make in India’ in its entirety. From being a country relying heavily on imports, when it comes to design or technology, it was time for companies to look at hiring, designing and then making in India. 

In this case, the company’s pride was the 41-tonner fully built body 10x2 vehicle that came with a patented lifting mechanism. This would be launched in the market during the second half of this year. 

A sum of Rs 1,000 crore capex has been earmarked for this fiscal while it looks at de-bottlenecking of all plants and addressing supply chain constraints. The company expects the defence business to be around Rs 5,100 crore in six years based on orders at hand. It is also using the 50 electric buses launched in Ahmedabad to experiment with battery technologies. 

A separate electric vehicles team sits out of IIT-M research park, he said. With steel prices going through the roof, Dasari cautioned about more price hikes on the anvil. However, 20-30 new application launches have been planned for this year. 

On exports, Dasari said the company had seen 50 per cent growth last year, when around 18,000 units had been shipped out. But, in Dubai market, it had faced some constraints. Selective about the markets to compete, he said Kenya was its South Africa hub while Ivory Coast would serve the regions close to it.