Ashok Leyland, the country’s second biggest commercial vehicle manufacturer, has launch-ed its first product from its joint venture with Nissan, the Dost mini-truck. V Sumantran, executive vice-chairman of Hinduja Automotive and chairman of Nissan Ashok Leyland Powertrain, talks on the vision with Swaraj Baggonkar. Edited excerpts:
How significant is the Dost LCV’s launch?
From a numbers point of view, it would be significant. The LCV (light commercial vehicle) story is still an evolving one in India; there is a lot of head room for growth. Due to urban congestion, big trucks are banned from entering the cities, so that's when smaller LCVs will come into play. Its going to be an important launch for Ashok Leyland, not just in India but in the export market as well.
What are the cost details of the LCV project?
The team which had worked on the Dost LCV designed and developed a new engine, a new chassis frame from scratch, retooled the cabin, new interiors. It took three years and three months to build this vehicle. The development cost of Dost, along with other two models we had targeted, was Rs 1,200 crore and it was met within that budget.
What sales targets do you have for the Dost?
We have a capacity of 50,000 units for this model and we will hit that in the first year. The CV industry has been doing quite well, though car sales have dipped. The small truck segment has a lot of opportunity to post growth, even while the bigger trucks’ demand may slow down. There will be demand for the smaller segment in the long term. Broader issues like higher fuel costs and expensive lending rates will have an impact on demand.
You had mentioned that Ashok Leyland would look at acquisitions. What specifics are you looking at?
We were a medium and heavy commercial vehicle maker. Then we forayed into defence, construction equipment and light trucks. We will look at the big bus markets like Brazil, China, Russia. Every month, we get four or five offers from investment bankers. We are constantly screening and looking at opportunities. It will be too premature to talk on whom we are talking to.
Are you looking at complete buyouts or technical alliances and joint ventures?
We can do any one of them, just like in Optare (UK-based bus manufacturer), where we picked up a 26 per cent stake. There is no hard and fast rule about it but the driving principle must be that it is high value and mobility technology or solutions-oriented.
