Ashok Leyland Ups The Ante On International Operations
Targets one-third of total volume sales in the international markets, with region-specific strategies.
Ashok Leyland (AL) has developed a new satellite manufacturing plant in Dhaka, in collaboration with IFAD Autos Ltd. of Bangladesh. With a capacity to assemble 600-800 vehicles per month, the 37 acre facility with state-of-the-art manufacturing infrastructure will cater to the local demand of the Bangladesi market. A body building and vehicle testing facility is underway at the plant, scheduled to become functional in about two years.
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As per company sources, the next overseas market likely to receive a similar satellite assembly is Kenya. Following the business model of its Ras al-Khaimah (RAK) bus manufacturing unit in Middle East, AL is planning to set up satellite plants in select target markets across the globe to mark local presence. This will also benefit the company in allaying tariff rates and duty structures. The preferred strategy in this regard is a joint-venture or investment from local dealers or automotive firms. It has opened an exclusive corporate office at Dubai to act as a hub for its international operations.
With over 10-12 percent of overall sales, Ashok Leyland is targeting a growth to at least one-third of total volumes from overseas market. At present, it is the fourth largest bus maker in the world, and fourteenth in terms of trucks. A good presence in global markets becomes essential for a sustainable growth, as over-dependence on the domestic market may become a liability in the long-run. The company has identified such target ‘clusters’ like SAARC region, ASEAN nations, GCC (Gulf region), West Africa, and East-Africa with specific strategies for each one in sync with the local demands. It already has decent dealer network at over 25 centres across the globe.
For instance, the RAK plant is manufacturing a region-specific Oyster range of buses, exclusively for the UAE and other Middle East markets. The ASEAN markets are identified as having great potentials for LCVs. Moreover, many of AL’s contemporary platforms including ‘Captain‘ trucks, ‘Boss‘ LCV, and ‘Sunshine‘ school bus platforms adhere to international standards. High performance engines with over 300-400 hp output are being developed, to cater to the growing trend in the international heavy-duty tipper and tractor segments. The company is also working on Euro 6 (BS VI) engine technologies along with German-based Albonair GmbH, a fully-owned subsidiary of AL’s parent Hinduja Group.
In a nutshell, Ashok Leyland has set a road map for a stronger presence in the international market, and is improving its delivery with enhanced, region-specific products. This is likely to have a positive impact on the brand’s domestic operations in India as well, in terms of product diversification and technological research and development.
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Images Credit: Autocar Pro, IFAD Group