Nitin Seth, President-LCV & defence, Ashok Leyland
After exiting the Light Commercial Vehicle (LCV) joint venture with Japanese auto major Nissan, Hinduja Group flagship Ashok Leyland Ltd, has now evolved a new strategy encompassing the revival of two brands that have been taken off the market for a year now.
In November 2016, Ashok Leyland completed the acquisition of shares from Nissan Motor Co Ltd in three joint ventures it had entered into with the Japanese firm.
Nitin Seth, President (light commercial vehicle & defence), Ashok Leyland speaks to T E Narasimhan on Ashok Leyland's intent to go it alone, its new product pipeline and its ambition of becoming the number two player in its segment.
How things have progressed after the break-up?
We have got the IPRs (intellectual property rights) for Dost, Partner and MiTR from Nissan. The production line from Nissan's factory has now moved to Ashok Leyland's Hosur facility and we are all set to embark on a new journey.
You have only one product currently. Will it be enough to cater to a market that has a demand potential of over 4,00,000 units?
We have started working on Partner and Mitr, which have been off the market for over a year now. The updated products will be launched this month. These will have address some of the issues related to overload and fuel quality.
Now that we have the IPRs, know-how, supply-chain and other resources, we are looking at deploying our own LCV products going forward. Every three months, something new will emerge from these platforms.
Dost, the small LCV from Ashok Leyland, has redefined the market and offers better technology. The company has never entered into a price war, but has been a premium player and this philosophy will be extended to new products as well.
Does it call for big investments?
We are looking at minimum investment of around Rs 400 crore in this business.
What happened to the Pillaipakam land, acquired jointly by Ashok Leyland and Nissan, to set up a greenfield facility for LCV?
Land is in our possession. The company will take a decision on construction at an appropriate time based on expansion plans
Where do you want to position Ashok Leyland in the LCV space?
When we decided to get into this business it clearly known this will be a good business in the long run and will also help the company address any cycles in M&HCV. During a slowdown in the M&HCV business, the capacity can be utilised for LCVs. This has also helped boost vendor confidence during such times as their business is assured.
We continue to bet on this business, which contributes to around 26 per cent by volumes to our sales and are confident 1:1 (one LCV sale for every M&HCV sold) is doable.
Today, with about 30,000 units, Ashok Leyland is the third-largest player in the LCV space and we aspire to be No 2 with about 50,000 units in 18 months and will double that in the coming years.
Earlier, Ashok Leyland had some constraints such as limitations in export markets for LCV business. What does the export market look like now, after the break-up with Nissan, and what are the other things stated in the agreement with Nissan?
First of all, from now onwards we don't need their permission for anything, be it for product development or sales. While the global market is open for Ashok Leyland, Nissan has agreed it will not enter the Indian LCV market for some time.
Ashok Leyland has identified four clusters as part of its LCV export strategy: ASEAN, Africa, Gulf and SAARC.