Sniffing turf battles in the medium and heavy truck segments, Hinduja-owned Ashok Leyland is diversifying its business.
Besides revamping its heavy and medium truck and bus line-ups when global majors such as Daimler, Volvo and MAN stepped in, the company is expanding its presence in business avenues such as construction equipment, defence systems and engineering service.
“We are diversifying our business to deal with cyclicality in the commercial vehicle business,” V Sumantran, non-executive vice-chairman, Ashok Leyland, told Hindustan Times.
Ashok Leyland’s construction equipment joint venture with the US-based John Deere came on stream with first product ‘Leyland Deere backhoe loader’. Last week the company took control of British low-floor bus specialist Optare Plc by upping its stake from 25% to 75%.
It used an alliance with Japanese major Nissan to enter the hitherto unexplored light commercial segment, apart from floating a subsidiary Ashok Leyland Defence Systems to cater to orders from the defence sector.
“We are the largest vehicle supplier to the Indian defence force. The supply to defence contributes 5% of our revenue,” Sumantran said.
Despite being a late entrant in LCVs, where Tata Motors, Mahindra & Mahindra and a host of other players are jostling for space, Ashok Leyland hopes to make inroads with products built on Nissan’s global platforms.
The company launched a light truck, Dost, about two months ago which Sumantran claimed has gained 11% marketshare in the 2-3 tonne segment. A multi purpose vehicle (MPV) Stile will be pitted against Toyota’s popular Innova, and a 6-tonne truck ‘Partner’ is also waiting in the wings. “We have significantly re-done these (Nissan) products to suit the Indian conditions. Stile will be launched in early 2013 and Partner in late 2013,” Sumantran said.
Ashok Leyland is pinning its hopes on its U-truck platform and low-floor buses to retain its bread and butter medium and heavy vehicle segment, where it has around 25% marketshare.