We can't depend entirely on the Indian market: Nitin Seth

Interview with Executive director (LCV marketing), Ashok Leyland

A year ago Ashok Leyland launched the Dost, its light commercial vehicle (LCV). The company says this has helped it capture 19 per cent of the LCV market. Nitin Seth, executive director (LCV marketing), in an interview with T E Narasimhan, said Ashok Leyland is working on passenger and compressed natural gas (CNG) versions of the Dost. Edited excerpts:

Are you happy with the Dost's performance in the last 12 months?
For many companies, the first product doesn't take off properly. But for us, it was extremely successful. Despite the market being depressed, we sold 35,000 Dost units last year, without giving a discount of even Re 1. This was at a time when the blood bath on the discount front continued in the industry. Our LCV products are available in only 12 states across the country. But these have a market share of 19 per cent. This was possible because of customer satisfaction, a good service and sales network and delivery. We had said we would give the feel of a car, a new network, etc, which we delivered.

Would you be able to continue this momentum? What challenges do you foresee?

Our job is not complete. We have to build on whatever we have built in the last one year. For 2013-14, the company has set a target to sell about 50,000 units. To meet the target, we would enter the northern and eastern markets in July and October, respectively. Suppliers were an issue, but now, this has been addressed to a large extent.

What about capacity? Dost is manufactured at Ashok Leyland's Hosur facility, where you cannot produce more than 50,000 units. When would the Pillaipakkam facility be ready?

There would be a gap for sometime (till the Pillaipakkam facility is ready). To address the gap, we are putting our heads together on how to increase productivity and capacity. Additional investment in Hosur won't be a good idea because eventually, we have to vacate and shift the Dost production to Pillaipakkam. One of the possibilities we are contemplating is to add one more shift. Currently, we are operating in two shifts in Hosur. We are studying whether a third shift can be added.

Any plan to look at export markets?
We can't depend entirely on the Indian market. So, we are looking at markets that are similar to India. In March, we sent 200 Dost units to our partners in South Asian Association for Regional Cooperation countries including Sri Lanka, Bangladesh and Nepal, to test the market. We don't want to go far away from India.

Tata and Mahindra LCV products are already running in these countries. What do you think about the competition from these companies?
We are very hopeful whatever we have done to them in India is replicated in export markets, too.

How you see Nissan's (Ashok Leyland's LCV joint venture partner in India) competition in the LCV segment?
We are very clear Ashok Leyland won't focus on the personnel segment; Nissan wanted to focus on this segment. We would focus on basic vehicle segments such as taxis, hotels and other commercial segments. The price points and features of Nissan and Ashok Leyland products would be different. We will stick to our domain, which is related to the commercial segment.

What are the other LCV products on the cards? When would these be launched?
When we enter the northern market, which would be in June, we would mark our entry with a CNG version of the Dost. We are also working on a passenger version of the Dost, which would be launched at an appropriate time. Production is a major constraint. This version would be launched when the Pillaipakkam facility is ready.