Ashok Leyland is planning to enter Global Top 10 M&HCV Players’ List

Ashok Leyland with its recent thrust in the sales of M&HCV segment, is now planning to go more offensive. The company is mulling to enter the top 10 list of medium and heavy commercial vehicle manufacturers in coming two-three years. For achieving this feat, the firm will invest about INR 500-600 crore annually into research and development of new products and by exploring new markets.

The company has already outlined plan that will be for both domestic and export markets. Vinod K Dasari, managing director, Ashok Leyland said that company wishes to sell one vehicle in overseas market for every two vehicles sold in domestic market. Company’s current 12-14 percent of the sales volume comes from export. In FY’17 this figure was 85,000 units.

Adding to the same, Anuj Kathuria, President (global trucks) Ashok Leyland stated that they foresee a lot of potential in six key markets which includes regions of Africa, ASEAN, Middle East and SAARC nations. The firm is preparing to set-up new manufacturing plants in African countries that would also cater to the domestic market as well. Presently, in the Middle East, company runs a facility in Ras Al Khaimah and also plans to set up a new one in Bangladesh. In India, there will be new plant in Andhra Pradesh and Telangana for manufacturing buses at a cost of around INR 80-100 crore that would produce around 2,200 buses every year.

Each new facility would cost around US$ 10-15 million (INR 64-96 crores) which is a portion of the overall capital expenditure of INR 500-600 crore per annum. Apart from setting up new facilities, company is also developing new platform for crafting modular vehicles.

Kathuria also added that there is only 17-18 percent gap between Ashok Leyland and the no. 10 global player in terms of volume and company hopes to bridge this gap in 2-3 years looking at the growth both in domestic and exports. According to Vinod Dasari, company is also expecting growing the defence business from INR 500 crore to INR 5000 crore in coming years as they claim they now have the capability to bag 20-25 percent of tenders as compared to 1 percent earlier.

But in the short-run planning, it is just expecting the three fold growth in the defence business. Ashok Leyland has grabbed orders from security agencies to develop mine protected and bullet proof vehicles. In domestic LCV category too, company is preparing to double its market to around 30 percent. For this company will be introducing one new product every three months for the next two years as part of its overall LCV investment of INR 400 crore.