Ashok Leyland puts up spectacular show in FY16

Outpaces market growth across all segments

2015-16 was a very special year for Ashok Leyland (AL) in its long and illustrious journey. As the Indian commercial vehicle industry recovered, AL ably positioned itself in the growth curve, accomplishing its goals through a combination of structural improvements within the company, continuous emphasis on product strengths and added thrust on customer focus.

AL

The total M&HCV industry grew by 30% over the previous year to 302,373 vehicles of which trucks grew by 32% and buses by 19%. AL achieved a sales figure of 98,809 vehicles in this segment, registering a better growth than the overall market. With the truck market growing across all geographies, the company gained market share in almost all regions. Spurred by growth in the private passenger segment, AL’s bus volume was up by 19% over the previous year, ahead of the market increase. AL’s M&HCV sales increased to 1,09,762 units with a growth of 41.3% as compared to 77,660 units during the previous financial year. The OEM’s M&HCV market share grew from 27.2% to 31.3%.

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Mr. Vinod K. Dasari, Managing Director, Ashok Leyland

Addressing the media at the company’s annual press conference in Chennai, Mr. Vinod K. Dasari, Managing Director, Ashok Leyland, said: “It has been a very successful and a fulfilling year for us. The investment we made in new products, the expansion of network as well as continued efforts in driving operational efficiency has helped us maintain the growth momentum. We are now poised to seize the opportunity the market presents in the immediate future.”

Mr. Dasari went on to add: “All this has been achieved with the valued support of our suppliers and dealers who have taken us from strength to strength. While we significantly improved our presence across the country the year also witnessed our expanded presence across the globe. In line with our brand promise and business philosophy of Aapki Jeet, Hamari Jeet, we have maintained our focus on customer and stakeholder value creation. We will continue to invest in new products, technologies as well as enhance our domestic and global network further in pursuit of profitable growth.”

Though the light commercial vehicle market was stagnant, AL sold 13% more vehicles over its previous year’s tally, selling 30,695 vehicles to retain its market share in the 2 to 3.5 GVW tonne category. In the international market, M&HCV sales stood at 10,951 vehicles, marginally down over last year due to economic slowdown in many target countries. However, LCV sales volume was up by 64%. AL continued its stronghold in the defence sector, in both kits and CBU vehicles. Despite growth challenges in the addressable segments, its power solutions business was up by 11% while its aftermarket business also registered a growth over last year from Rs. 820 crores to Rs. 855 crores.

AL-Boss

It was also told that Sunshine, purpose-built school bus with lots of firsts to its credits, showcased at the Auto Expo earlier this year, would be launched during the first quarter, followed by Guru, an ICV specifically developed for rated-load applications. The Sunshine has already been launched in the Vijayawada market. Other new introductions are MaxIT for customer-centric sales and marketing process, DigiSmart for an interactive ecosystem among the company, channel partners and customers, Leyland Direct for efficient service access, Easy Pay which is an e-wallet and I-alert that helps track vital information in vehicles on a real-time basis for faster turnaround.

AL also did a fairly better job on the network side in LCVs, adding around 40 touch points to its existing LCV network to bring the total to 390 touch points across the country. With three consecutive years of slowing LCV demand, AL Dost has maintained its market share, with more than 25,000 units sold during the year.

“We are reviewing our portfolio of investments and are rationalizing them. In the current year we have decided to impair some of our investments and this is in line with our strategy of increasing our focus on the core business as we move forward.  We would be completing this rationalization process by end of the FY17.  The focus of the company would continue to pursue the path of profitable growth”, shared the MD.

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Viewed from a financial perspective, AL achieved a 39% increase in sales turnover at Rs. 18,822 crores compared to 13,562 crores last year. Profit after tax after exceptional items for the year stood at Rs. 722 crores, as against 335 crores in the previous year, recording a growth of 115%. FY16 saw the company clock its largest volume growth in truck sales from Northern India. In the 10×2 haulage market, AL has a clear winner, the 3718, which commands a market share of close to 70% overall. Awards like the Captain winning the Best Mobility Design Award, MCV Rigid Cargo of the Year Award and the Company’s Risk Management Programme bagging the coveted Firm of the Year Award were just a few high points in the stand-out year.

Major new developments:

Engines & Aggregates

  1. Development of EGR variants of BS-IV engines of 100 – 230 HP. Ashok Leyland launched one of the first SCR heavy buses as early as in 2011. Those were SCR and now they have come out with EGR systems for the 4- and 6-cylinder versions.
  2. Development of alternate fuel injection system for BS-III and BS-IV variants of H4 engine
  3. Development of dual data set strategy for 140 HP to 230 HP range of engines. This means a truck can comfortably run in a lower torque mode when empty and run with full torque mode when fully-laden.
  4. Development of new variants like Guru from existing ICV truck cab.
  5. Demonstration of Euro-VI compliant engine on N4 platform.

Vehicle Models

  1. Launch of 4×2 and 6×2 tractor models on Captain platform with factory-built cabs and Dual Data Set.
  2. Launch of Project Sunshine, next-generation school bus with unique child-friendly features.
  3. Launch of BS-IV haulage variants in FES trucks.
  4. Launch of export models for ICV bus variants and BS-IV compliant M&HCV buses with SCR system.
  5. Demonstration of ultra-capacitor hybrid vehicle Hybus at Auto Expo.
  6. Demonstration of fully-packaged Euro-VI compliant Captain vehicle at Auto Expo.
  7. Demonstration of cost-competitive next generation ICV platform Guru.

Results of R&D

  1. Introduction of new BS-IV compliant engine and vehicle variants with superior fuel efficiency
  2. New vehicle platform launched with improved performance and USPs
  3. Technology demonstration for Euro-VI compliance
  4. Improved export market penetration with cost competitive bus models
  5. More than eight provisional patents filed during 2015-16