Vision Accomplished: Ashok Leyland breaks into global top 10 in trucks

Company already among global top 5 in buses

FY18-19 will go down as a landmark year in the history of Ashok Leyland (AL). After years of focused pursuit and progress, the CV maker has managed to accomplish its global vision during the financial year. Mr. Dheeraj G. Hinduja, AL Chairman, states in the company’s FY18-19 annual report: “With great pride, I would like to share that in 2018-19, Ashok Leyland has achieved its Vision to be among the global top 10 players in medium and heavy trucks and top 5 in buses. This is a significant achievement in the annals of our company considering the ever-changing market dynamics and increasing competitive pressures.”

Mr. Dheeraj G Hinduja, Chairman, Ashok Leyland

The CV market in India posted a growth of 18% YoY in total industry volume (TIV), which was driven by 19% growth in LCVs and 15% in M&HCVs despite challenges caused by revision in axle load norms and the NBFC liquidity crisis. CV exports grew by 3% over last year driven by 27% growth in M&HCV trucks, with other segments showing a decline over the previous year.

Robust growth

In FY18-19, AL sold 131,936 M&HCVs in the domestic market (16,323 M&HCV buses and 115,613 M&HCV trucks), growing by 13.2% over the previous year. LCVs continued to register record sales of 54,508 vehicles, with a growth of 26% over the previous year. The company sold 12,301 vehicles in the export markets of Middle East, Africa and SAARC region. 21,859 engines were sold in industrial and marine applications registering a growth of 16.6% over last year.

Revenues of its spare parts business clocked 18.6% growth over last year through improved penetration in multiple product groups, enhanced network reach, specific initiatives in supply chain, packaging and warehouse operations. Its digital initiative LeyKart continues to fulfil the promise of on-demand availability of spares. The OEM introduced the En-Dhan card as part of Customer Solutions Business offering for its customers which has been well received. So far over 54,000 customers have been enrolled on the En-Dhan card program. The company continued its focus on enhanced service offerings through various initiatives such as SELECT, Service Mandi and Express bay for faster service.

M&HCV buses

AL maintained its fourth position in volume sales. In the domestic M&HCV bus segment, the company continues to maintain overall leadership, with a market share of 41.2%. It regained its leadership in STU segment with strong order wins from IRT, Karnataka & UPSRTC STUs, thereby registering a growth of 88.2% over the previous year. Ashok Leyland launched new products like Viking Lite for staff transportation in MDV private and variants of Lynx Smart in ICV private segments. It supplied 100 Lynx Smart buses for the 2018 Hockey World Cup held in Bhubaneswar.

LCVs hit new high

In FY18-19, the company reached a record sale of 54,508 vehicles with a growth of 25.5% over the previous year. It launched the DOST facelift, Partner 17ft, MiTR AC buses for domestic market and Partner LHD for export market (UAE and West Africa). The same model is expected to be launched in other GCC countries. It continues to deliver best-in-industry SSI/CSI, lowest defect, best-in-class low warranty and service retention through its 540+ exclusive LCV outlets, thereby achieving service market share of 67%.

Defence Biz

During the year, AL supplied 260 units (including IO) of completely built-up units (CBUs) and 1,357 vehicle kits. The company is the proud manufacturer of the first Indian vehicle to clear the side mine blast test of MBPV 4×4. Defence business of the company will continue expanding the product and application range while enhancing indigenised and cost-effective defence capabilities.

Foundry Division

The Foundry Division of AL mainly caters to the automotive industry in the country and has product segments of Cylinder Block, Head and Tractor Housings. For the year 2018-19, the AL’s Foundry Division achieved its highest-ever production of 106,054 MT (increase of 9% over last year) and sales (including captive consumption) of 97,645 MT (increase of 2% over last year).

Other notable highlights

  • During FY18-19, AL’s performance in the international arena has been tepid due to market slowdown in target countries and in the defence side, while order pipeline is improving and tenders are being won, a surge in sale is expected in FY20 when budgetary constraints are expected to be removed.
  • Among India’s best brands, AL moved up from 37th to 34th position validating some of its corporate and market promotion initiatives.
  • On CSR, under the “Road to School” programme, from a modest beginning of covering 4,000 children in 36 schools, the OEM now addresses over 34,000 children in 333 schools and is targeting to reach 100,000 children in the next two years.
  • To sustain the growth momentum and maintain the technological edge, as always, AL has been investing in extending or reinforcing its product profile. On the truck side, eight new variants were introduced as dictated by customer needs covering intermediate and heavy range for specific applications and they have all been well received. New product models 4123, Guru 10T, Boss 1616 sleeper and Partner 17 ft were launched in response to customer demand.
  • The Dost+ which was introduced earlier as a variant in the LCV segment won three awards – adjudged “Pick up of the Year” by Apollo as well as ET and “SCV of the Year” by ET.
  • During the year, AL conducted large-scale National and Regional Expos to showcase its wide product portfolio and technological edge to customers across the country.

Future-ready

AL has some key product actions on the anvil to make it future-ready. Some of the key highlights in this regard include:

  • As known, FY20 is a period for all players to get ready for the BS-VI launch by April 1, 2020. Unlike global majors, Indian players are required to leapfrog from BS-IV to BS-VI in just three years. This is a steep challenge for both OEMs and the ancillary sector. In this regard, AL boasts that its state of readiness is next to none in emission conformance and fuel performance.
  • Concurrently, the OEM is also rolling out its Modular Vehicle Programme, that enhances flexibility to meet customer needs in a cost-efficient way.
  • Building on the success of the current LCV range, a suite of products in a new platform is being readied for launch from April 2020.
  • Its Electric Vehicle (EV) strategy and roll-out plan is in shape with a competent team put in place to pursue this thrust area vigorously.
  • The CV industry, like all others, is likely to see disruptions in the new digital age. Foreseeing the changes, AL has been taking steps to ensure that it stays ahead of the game, whether it is in products, technology, or service, always keeping the central focus on its customers.