 "Ashok Leyland is committed to LCV business, says Vinod K Dasari")
The LCV business, for which it had joined with Nissan, is under pressure due to high loss that stood at Rs 791 crore in 2014-15.
Addressing the shareholders at the company's Annual General Meeting today, Vinod K Dasari, managing director, Ashok Leyland said, "Ashok Leyland is committed to the light commercial vehicle business, and we also believe that with all our partners we should focus on developing a win-win partnership."
"While the STILE and Evalia did not do well, and we had to take a write-off, the partners are working very hard together to improve the profitability of the joint venture," he said.
Recently, Ashok Leyland stopped production of its commercial passenger vehicle 'STILE', while its partner Nissan has decided to stop production of its Multi Purpose Vehicle (MPV) model Evalia. Both the partners were not happy with the products performance.
"We have stopped production, since the product was not successful. We will stick to only commercial vehicles," said Dasari said during the annual press conference earlier.
STILE was launched in 2013, to address various applications like 7-8 seater people transport in the urban and rural areas.
"Nissan Evalia's design and styling is unconventional and unfortunately it has not met our sales expectations with our Indian customers. We continue to promote the vehicle with our target customers," said Nissan's spokesperson.
Nissan JV continues to be under pressure. In 2014-15, the JV reported loss of Rs 791.16 crore in as compared to Rs 174.51 crore, a year ago. Turnover has dropped to Rs 1,030.41 crore in 2014-15 from Rs 1,052.15 core in 2013-14.
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However Ashok Leyland said it would launch variants of Dost, which was the first product came from the JV.
Ashok Leyland has reported a six per cent drop in LCV sales overall in 2014-15, while it managed to gain market share to 16 per cent from 14 per cent last year. Ashok Leyland has said that it decided to write down its investment of around Rs 224.19 crore in the JV, which reported loss of Rs 791.16 crore in 2014-15.
In 2007, Ashok Leyland announced a joint venture with Japanese auto giant Nissan to develop and manufacture LCVs, under Ashok Leyland and Nissan brands, in the 2.5 to 7.5 tonne segment. Ashok Leyland holds 51 per cent in the JV.
Dheeraj Hinduja, chairman, Ashok Leyland in his speech at the AGM today said that the Dost maintained its market share and sold over 25,000 numbers.
The company is also extending the range of products by launching DOST Strong, four type version of PARTNER model and an improved MiTR bus.
Dasari said, Dost, the first product developed by the JV and launched by Ashok Leyland is doing well and 100,000th Dost was launched recently. Today Dost is the largest volume brand in the Ashok Leyland portfolio.
The company has 350 touch points for LCV segment alone.
On overall performance of the company in 2014-15, Hinduja said, AL is one of the first companies to turnaround quickly after the downturn. "This shows that the strategy we followed is in right track and we could increase our market share, despite competition intensified."
He added, with activity anticipated to pick up in iron ore and coal mining, the Captain range is strategically positioned to exploit growth in these sectors.
There will be further thrust in the current year to the business transformation exercises in progress and the company expect to see increase in performance.
"We are positioned in my view to do even better when the economy improves in the short to medium terms." Speaking about the overseas markets for the company, he said that the Ras al-Khaimah facility will also address the East and West African market going forward.
Hinduja said, the company spent about Rs 200 crore in R&D and will look at spending similar amount during the current fiscal.