Interview: Nitin Seth, COO, Ashok Leyland
Published On Sep 16, 2020
In an interview, the company's COO explains the way forward for the LCV business, the growth opportunities in domestic & overseas markets, and the vital role for the all-new Bada-Dost in this game-plan. Ashok Leyland caters just 34% of India's LCV market and aims to take this to over 65% with a slew of new product introductions over the next few years.The company hopes to launch a new product every 3-4 months to fill the LCV portfolio gaps this fiscal year. Read the details.
Could you take us through Ashok Leyland's LCV journey thus far and the strategies into the near-term?
Our LCV journey started way back in 2011 with three new products as part of our joint venture with Nissan. At that time, the LCV market was competitive; this meant our product had to be unique, with a lot going for the customers. What we did was differentiate basically to offer unique features ahead of the market. For example, we bought AC, power steering, a car like dealerships, premium price trucks but the significantly lower total cost of ownership offering more value to the LCV customer for the first time. At that time, the overall LCV market size was small, and the segment we entered consists of just 30% of the industry. We had believed the market would shift towards higher payload mini-trucks that turned out to be true. The segment we entered wasn't catered either by market leader Tata Ace or Mahindra Bolero pickup. This has helped Dost gain customer trust and given us a sizable market share in the above 1T payload mini-truck segment.
What is the road ahead for the light commercial vehicle business?
Our vision is to be among the top 10 truck players globally, and the LCV business is a big part of this growth projection. We want to increase our LCV sales volume nearly four times from 50,000 to 200,000 units annually. At present, the LCV business contributes 39 percent of the company's total volume, yet LCV is 70 percent of India's India's total truck market, and we see a lot of upside for our growth. The LCV market in India is quite large today, with an annual volume of nearly 600,000 units. We're a relatively small player in this market, catering 34%; our job over the next few years is at least to address 65% of this market. This also implies that overall our volume will grow substantially.
Elaborate on the new LCV platform and the Bada Dost- as a new generation truck?
After our joint venture with Nissan ended in 2015, we had one legacy truck from it. We had to develop a new truck to fulfill our high growth ambition in the LCV business. Thus, the new product's journey took off, which we internally called project-Phoenix with a clear objective of developing our LCV platform that could pave ways to introduce multiple products. Our philosophy is we have to offer better than what we have right now. We branded this truck as Bada Dost because whatever we do good, the goal is to make it better, bigger, and this is how the name for the new truck is decided.
Dost is smaller than Bada Dost- from almost every element, and the customer would make it out the way it looks. However, the market implies that we will discontinue the existing Dost range, but that is not the case. I want to assure the customers that both the products will co-exist in the market. Dost isn't going away as both the trucks cater to two different segments.
What are the key highlights of Bada Dost?
Bada Dost is a modern truck developed as a global truck for the left and right-hand drive markets. Our USP in LCV has been differentiating from what is already available to the consumer. Bada Dost scores high on several aspects such as the interior is like a car, gear mounted lever, digital instrument cluster, AC, USB port, etc. All the features on offer are certainly a lot of upgrades, and the customer would like it.
The LCV buyers largely consist of driver cum owners; they connect with the truck deeply and feel a lot about their vehicle, often it is a home to them. Hence, if the truck is comfortable, they will drive more, obviously resulting in higher productivity, more revenue, and profit. Bada- Dost can do inter and intra city cargo trips quite effortlessly, so the driver is virtually at home. We're offering a 3-passenger seat in the cabin for the first time so the driver can sleep and rest in between trips. We also introduced a new concept called collapsible brakes- this means the brake can be engaged and still collapse, it was considered undoable, but we have proved it. There is a red light flashing on the screen indicating the brake is engaged, even if the driver forgets to disengage, the vehicle will not move.
How do you plan to roll-out this new truck? The manufacturing and retail distributions?
We have put-up a new robotic manufacturing line at our Hosur plant to manufacture this world-class product. Generally, this kind of manufacturing is followed by carmakers. Still, we have decided to put up a full robotic assembly line to make a global LCV without any defect, as there won't be any human intervention. On the retail sales side, we have also revamped our LCV dealership across the country, offering the customer a car dealership like experience, making his buying experience seamless. Considering the pandemic, we are also now offering online booking of trucks through our website.
The overseas markets have been one of the key focus areas for Ashok Leyland. Can you take us through the plan?
Bada Dost is a global platform; today, we aren't present in key global truck markets. With the launch of AVTR and new LCV platforms, our global footprint will increase. Therefore, our focus is not only on the domestic market but export too. Today, 85 percent of the global market is left-hand drive, and with the new trucks, we can address the global truck. Bada Dost will be available in both left and right-hand drivers; it will have multiple GVW options, including diesel, CNG, and even electric in the future.