Ashok Leyland plans big drive in five country clusters

hennai: Ashok Leyland is targeting five country clusters — West Asia, Africa, CIS, Asean and Latin America — to either export to or start local operations.

Last year, the company hired Mr Per Gustav Nilsson from German truck-maker MAN as Executive Director, International Operations, to spearhead this strategy.

Mr Vinod K Dasari, Managing Director, Ashok Leyland, says the company has to look beyond its traditional markets of Sri Lanka and Bangladesh, which are now “as good as domestic markets.”

“We have to keep the momentum growing outside too, to fight the cyclicality in the domestic market,” says Mr Dasari

In an interview to Business Line, Mr Dasari said the idea is to either take Indian products to these market clusters or bring in multinational products. For instance, buses from British company Optare (which Leyland acquired) are being sold in South Africa. Leyland sells vehicles made at its Prague Avia truck plant in Singapore. Its plant in Ras-al-Khaimah achieved full capacity last year, rolling out four buses a day to West Africa and West Asia. Some of the buses to Africa also go directly from India.

Bus first, truck then
The company believes in entering markets by partnering with local players that have both market access and knowledge. Ashok Leyland provides a chassis or chassis kit, on which the local player builds the body. “We can slowly even bring in CKD kits.”

This strategy has worked well in markets such as Russia and Ukraine, says Mr Dasari. The company also has local partners in Chile now. “And we have partners coming up in Vietnam, Malaysia and Indonesia.”

And when Ashok Leyland steps into a country, it takes its bus there first. “The reason being the bus has a limited (travelling) radius. Once the brand starts to build and we know more about the market, then we bring in trucks,” says Mr Dasari.

Though Ashok Leyland is keen to have local partners, it is not averse to acquisitions. “Even a big ticket acquisition. But it must give us two things: market access and technology. We will not acquire companies just to make ourselves bigger.”

Exports grew 25 per cent last year to 12,852 vehicles — accounting for 13 per cent of the overall business.

“We want to consistently maintain a 10-20 per cent ratio, depending on what happens in the world markets,” says Mr Dasari.