V Sumantran, vice-chairman of Ashok Leyland, told Business Standard: “We (it is a joint bid with L&T) are the L1 (meaning, lowest bidder) in the tender which was opened. Discussions are going on. Most likely, we will execute the order to supply about 100 units.”
He said the company was also making efforts to boost its presence in defence logistics, with a heavier truck programme.
|BUSINESS OF DEFENCE|
It may be noted, all the transport and logistics the company we do in Ashok Leyland, the tactical armoured vehicles and special projects are done through defence company. “We do about around 2,000 vehicles every year. This year also we will do the same level”.
Ashok Leyland Defence Systems (ALDS), a joint venture company, provide tactical and armoured solutions to address defense requirements in India and globally.
Ashok Leyland Defence Systems (ALDS), a joint venture company, provides solutions for defence requirements. According to the company's website, the two partners for the company's business in this segment are Panhard General Defense, France, and Krauss-Maffei Wegmann (KMW) GmbH and Co KG, Germany. The company is the largest supplier of logistics vehicles to the Indian Army. “We do about 2,000 vehicles every year,” said Sumantran.
Leyland also supplies a large number of vehicles for various applications to the air force and navy, and to para-military forces, such as troop carriers, refuellers, vehicles for gun mounting, fire-fighting, UAV support and recovery vehicles, flat-bed trucks and buses.
According to Sumantran, defence was adjacency for the company which it saw as part of its strategies in the last five years. “It is logical to grow and it is something that the company felt will provide the scale and will help to leverage its competency and capability”.
He noted last five years were spent on the backdrop of a careful and clear strategic growth plan. The company which has been core medium and heavy vehicle (M&HCV), realised that scale is important to grow.
“In this industry without scale you can't be a long time player and for us to achieve scale, we did number of things, apart from core business (commercial vehicles, buses, foundries, engines),” he added.
Then the company saw a huge growth on the Light Commercial Vehicle (LCV) side, and it was a logical investment along with Nissan and then it saw an opportunity in construction equipment and infrastructure and therefore it made investment, along with John Deere.
While these gave more platform, ofcourse tit also invested in upgrading its products and capacities on the core business, which is M&HCV. The new Pantnagar, Uttarkhand is a fully integrated and importantly higher productivity with lower cost, said Sumantaran.
“Now its time for us to realise the benefit of more modern product lines, benefits of productive manufacturing plant and realise the benefit of better products features, performance like fuel efficiency. I would say bulk of our investments are behind us and now hopefully we will make better harvesting from the investments we made,” said Sumantaran.
On Joint Ventures
Both the joint ventures – with Nissan and John Deere – are proceeding on course and product guidance staying on course in Nissan's Joint Venture, which is for LCV, said Sumantran.
From the John Deere JV, the company is planning to launch one more product this year in the Backhoe Loader segment and one on Wheel-Loader Segment. “The products are good, but the industry is affected due to downturn. Its nice to have a good product, but nothing to dig,” says Sumantaran on a casual note.
They are depend on PWD, road contracts which are running little slow. It will come back. In India we cant worried about one year issue, we made investments for long term.