Ashok Leyland hopes to be among top 10 M&HCV players in 3 yrs

The company is setting up new manufacturing facilities at Andhra Pradesh and Telegana

After achieving its target to become one of the top five players in the bus market, commercial vehicle major Ashok Leyland is aiming to become one of the top 10 M&HCV companies in the next 2-3 years. To support this, the company will invest around Rs 500-600 crore every year into development of products and capacity.

ALL has chalked out a plan for the coming years for both domestic and export markets.

While growing the domestic volume, major thrust will be given on export, said Vinod K Dasari, managing director, Ashok Leyland. The company wants to sell one vehicle outside India for every two vehicles it sells in India. Currently, around 12-14 per cent of the total sales comes from outside India. Last year, the company's total sales stood at around 85,000 units.

Anuj Kathuria, president (global trucks) at Ashok Leyland added that the company sees a lot of opportunities in six key markets, including Middle East, Africa, ASEAN and SAARC countries. The company is also planning to set up new assembling facilities in African countries to cater the domestic market.

It currently has a facility in Ras Al Khaimah, Dubai, where it plans to double capacity and also set up an assembling facility in Bangladesh.

Gopal Mahadevan, CFO, Ashok Leyland said each facility would cost around $10-15 million and this would be part of the overall capex, which is in the tune of around Rs 550-600 crore every year.

Dasari said the company was also developing a new platform/architecture for building modular vehicles.

In India, the company is setting up new facilities at Andhra Pradesh and Telegana at a cost of around Rs 80-100 crore each to manufacture buses, added T Venkataraman, senior vice-president (global buses), Ashok Leyland. Capacity of the facility would be around 2,200 buses each a year.

Kathuria said today the gap between Ashok Leyland and the number 10 global player in terms of volume is around 17-18 per cent. With the growth, which is expected to surpass the industry growth in India and growth coming from outside India, the company will be able to achieve its target of becoming one among the top 10 M&HCV players in the next two to three years.

Dasari said the company was looking at growing the defence business to Rs 5,000 crore from around Rs 500 crore in the coming years.

In short-term, it plans to grow the defence business by 3 times, said Dasari.

“We have developed capablities to bid for 20-25 per cent of the tenders of the Indian army against one per cent earlier,” said Amandeep Singh, who heads the defence business at Ashok Leyland.

The company has bagged tenders for mine protected vehicle and bullet proof vehicles from the security agencies and targets a threefold business increase from its defence vertical, he said.

Nitin Seth, president – LCV, Ashok Leyland, said company planned to double its market to 30 per cent in the domestic LCV business. To support the target, the company every three months will launch one new product for the next two years.

The company plans to invest around Rs 400 crore in LCV business in the next two years.