Ashok Leyland is among the top 10 makers of medium and heavy commercial vehicles (M&HCVs), and in the top five among bus makers. Dheeraj Hinduja, chairman of the company, shares with T E Narasimhan what’s next on their agenda. Edited excerpts:
What’s your new vision? In what time frame will you achieve this?
We want to be in the top 10 in all commercial vehicles. The previous vision was centric towards M&HCVs; the new one captures the whole organisation – light CVs, the defence sector, parts, etc. The new task is more challenging as it encompasses all the light vehicle players globally.
We have created 64 objectives across the organisation that the whole team needs to be focused upon. I would be disappointed if we are not able to achieve the vision in a lesser time frame than what we did with our last one, of less than nine years.
What’s your plan to strengthen international operations?
Strengthen the product offerings. Foray with LCV, which will help build the brand before launching M&HCVs. We have already come out with new Left Hand Drive vehicles and will complete the LCV portfolio with the Phoenix (5-7.5 tonnes), which will fill the gap in the LCV portfolio.
I am looking at developing partnerships, distributors, parts availability… everything that creates a support system for the customer. We want to focus on specific markets and have a larger penetration in those. And, be seen as one of the local players, with the full team support being available, just as we have in India.
In India, while BS-VI pre-buying (these take effect next April) will give volume in 2019-20, what will happen after that?
We have identified a number of ways to reduce costs substantially, and to focus on increasing the sales. We are hopeful the industry would grow, considering the new government initiatives, including infrastructure boost, will boost the Gross Domestic Product, which in turn will increase the demand for vehicles.
Today, Leyland’s market share is 32 per cent overall. In every segment, the company’s market share is in excess of 30 per cent but in ICVs (intermediate CVs), the share is 23 per cent. So, I asked my team what's hindering us from getting up to 30 per cent, and to address the areas we need to and come to the right solution.
The north and east still remain markets where we are sub-30 per cent. Whereas in the west and in the south, the market shares are higher. There is no reason why we cannot increase our share. Robust products, after-sale services and parts support would support this.
Will Albonair (the maker of exhaust treatment systems it bought years ago) give you a cost advantage in the BS-VI era?
Albonair brings experience as it has been servicing other OEMs (original equipment makers). We are moving from BS-IV to BS-VI in a relatively short frame of three years — in every other country, this has taken six to eight years. The three-year time frame doesn't allow enough tests and this is where Albonair’s experience comes in.
What is the status of your search for a new managing director (to replace Vinod Dasari, who quit last year)?
We have some very good internal candidates. At the same time, we are looking at external possibilities to determine who is the best person. While finding the right person, we want to ensure stability of the organisation. This is a critical year — we’re moving, we’ve got the introduction of our new light vehicle platform, the BS-VI transition, etc. We are comfortable taking time, as we have a very strong team.
Why is the Hinduja family interested in Jet Airways and in aviation, considering both are in trouble waters?
Our group is defined as industrialists, as investors. If there are good opportunities, we will explore, and we look at many sectors, many opportunities. We are looking at different areas. That’s what the family does — while ensuring the businesses are run professionally, we look at what are the future growth areas.
Will Jet then be only an investment?
Once we get into any business, and once we are in a sector, we ask how do we continue growing? We came into Leyland 30 years ago, we came into Gulf Oil 35 years ago. We restarted in renewable energy two years ago. You need to keep up with the times, to be sure that you not only have some of the old brick and mortar businesses but also the new businesses that are going to be the future leaders. The India opportunity is very good. And, with a strong government in place, everyone’s looking at India as a very good investment opportunity. We being based here, in any case, it just seems right to be doing so.
