Building the brand Ashok Leyland

BUILDING THE BRAND

For more than six decades, Indian-based commercial vehicle manufacturer Ashok Leyland has been moving people and goods in countries across the world. Felicity Landon reports on the latest developments.

Building a brand – and maintaining it – is always a challenge. Ashok Leyland (AL) tackled this challenge with the recent signing up of the iconic Indian cricket captain, Mahendra Singh Dhoni, as brand ambassador. “He fitted the values of Brand Ashok Leyland very well: grounded, a true son of the soil, passionate, straight-thinking and a leader,” says Vinod K. Dasari, the company’s managing director. “He is the face of a robust communication campaign and leads a slew of marketing initiatives. Dhoni’s recognition transcends regional and linguistic barriers and gives traction to AL’s ambitions to be a stronger global brand.”

Ashok Leyland, one of India’s largest commercial vehicle manufacturers, certainly has a strong base to build on. Its buses carry 70 million passengers every day. Nearly 700,000 AL commercial vehicles are on the roads. And the company is the largest supplier of logistics vehicles to the Indian Army. Headquartered in Chennai, AL is the flagship of the Hinduja Group, a transnational conglomerate, which owns a 50.98 per cent stake in AL.

In recent years, AL has maintained its position of pre-eminence in the Indian commercial vehicle (CV) sector and protected its pole position in the bus segment, while continuing its pioneering efforts to redefine the Indian CV industry, says Vinod Dasari.

“What has changed, however, is that firstly, we have become a ‘full range player’

with the addition of light commercial vehicles (LCVs) to our portfolio. Our net worth has increased, we have enhanced our manufacturing capacity, spread our global footprint, given wheels to its plans for diversification, have kept winning awards, and have taken significant steps towards building Brand Ashok Leyland.”

AL’s range of products spans 2.5 tonne gross vehicle weight to 49 tonne gross trailer weight in the truck segment; from 18-seaters to 80-seaters in the bus segment; and a host of special application and defence vehicles and engines for industrial, genset and marine applications.

The most significant addition to its range has been ‘Dost’ (meaning ‘friend’) with a rated payload of 1.25 tonnes, the first small commercial vehicle (2–3.5 tonnes) from the AL-Nissan joint venture.

“Dost has been positioned as a segmentsplitter, is targeted at those seeking enhanced levels of features, performance and payload,” says Dr V Sumantran, vice-chairman, Ashok Leyland and chairman, Nissan Ashok Leyland Powertrain Ltd. “Dost embodies an attempt to deliver Japanese technology at Indian costs at a very competitive cost of ownership to the evolving LCV customer. It is already the No. 2 brand in India in its category and was recognised as the ‘LCV Cargo Carrier of the Year – 2012’.”

Meanwhile, the company’s flagship heavy vehicle models, such as the 1212, 1616il and 2516il (all haulage), 3116il and 3518il (tippers) and 4019il (tractor trailer), have been performing well, helping AL gain market share because of their superior fuel efficiency, thanks largely to the inline fuel

pump. AL is the first company in the world to offer a Bharat Stage III engine on a commercial vehicle with an inline pump.

AL is readying itself to introduce a host of new, innovative products. One of them, the Jan Bus, will be the world’s first single-step, front-engine, fully flat floor bus. Then there will be new variations on the company’s futureready U-Truck platform and a whole new range of high-performance, high-powered Neptune engines, entirely developed in-house.

Going global

Since AL started international operations, the SAARC (South Asian Association for Regional Cooperation) markets have been its stronghold, especially Sri Lanka and Bangladesh. In a strategic move to increase its global footprint, the company has identified five market clusters to attack – West Asia, Africa, CIS, ASEAN and Latin America.

“2011–12 was a great year for international operations, with 25 per cent growth, but the heartening fact was that 69 per cent of sales came from outside our hitherto strong SAARC markets,” says Vinod Dasari. “The company is rapidly making inroads in Africa. The Bus Rapid Transit System in Lagos runs almost entirely thanks to our buses. We have opened offices in Nairobi (Kenya) and Lagos (Nigeria), and inaugurated a new dealership in Algeria. Many more foreign roads see our buses, including in Vietnam, Turkey, Ukraine, Egypt, Peru and Singapore.”

While AVIA Ashok Leyland Motors s.r.o. gives AL a beachhead in Europe and recognition through the famous AVIA D-Series line of trucks, the acquisition of controlling stakes in Optare plc, a well-known bus maker in the UK, has been a significant step in realising its global bus strategy.

Ten plants

AL has an annual installed capacity of 150,000 vehicles across seven manufacturing facilities in India: four in the state of Tamil Nadu and one each in the States of Maharashtra (at Bhandara), Rajasthan (at Alwar) and Uttarakhand (at Pantnagar). The Pantnagar plant is the company’s largest and latest, inaugurated in March 2010 and is now running full steam.

There are also manufacturing facilities in Prague in the Czech Republic, as part of AVIA Ashok Leyland Motors, at Sherburn, UK, at Optare plc and at Ras Al Khaimah in the UAE, which has already reached peak capacity and is crucial for feeding the high-potential Middle East and African markets.

AL’s main customers for trucks include large and small fleet operators and logistics management companies. For buses, the target customers are state transport corporations and private bus operators. Light vehicles are pitched at small fleet operators and drivers who make ‘last mile’ deliveries.

Strategic partnerships

AL has four 50:50 strategic joint ventures (JV). The JV with Nissan Motor Company for the development and manufacture of LCVs has already borne fruit with the successful rollout of Dost. The JV with John Deere for the development and manufacture of construction equipment products has come to fruition with the launch of the 435 backhoe loader under the new brand Leyland Deere.

AL has two more JVs – one with the Alteams Group, Finland, for the manufacture of high pressure die casting aluminium

extruded components for both the transport and telecommunication sectors, and the other with Continental, AG, Germany, for the development of vehicle electronics, instrument clusters and related products.

Another area of focus for AL has been its defence business. Building on its pedigree in logistics vehicles, AL is now focusing on creating a presence in the realm of armoured and tactical vehicles for armed forces both in India and worldwide. The MoU linked recently with Krauss Maifei Wegmann, Germany, one of the foremost names in the armoured and tactical vehicle space, and this has been an important step in the right direction.

Research and development has always been an area of key focus reflected in the R&D spend for 2011–12 of Rs 349 Crore (US$64 million), about 3 per cent of turnover and a 20 per cent increase over 2010/11. Apart from strengthening the current portfolio, the thrust has been towards competency development for the future through facilities and people. AL has a history punctuated with technological innovations that have become industry norms. The pioneering work done in the area of developing alternative fuels has been quite significant: the introduction of India’s first CNGpowered bus; development of the first hybrid electric vehicle followed by the H-CNG engine that is even more environmentally friendly than a CNG engine; and the HYBUS – India’s first CNG hybrid plug-in bus.

And what of the years to come? Vinod Dasari is quite clear in his priorities. “It is not possible to influence aspects that are beyond our control, like the global economic scenario, so we will continue to focus on what we can, which is remaining completely customer-centric and committed to engineering transport solutions that best meet customer needs. The market is witnessing technological convergence, rising customer demand and fierce competition and therefore will pose fresh challenges going forward,” he concluded. n