Ashok Leyland, the Chennai-based commercial vehicle giant, is looking to tighten its grip on the South Indian market. Already a powerhouse in the region, the company currently commands over 40% of the Medium and Heavy Commercial Vehicle (MHCV) segment.
Not content to rest on its laurels, Ashok Leyland has set its sights even higher, aiming to boost its market share to 45% in the next few years.
“We do think that we have a chance to increase market share further, but it will be a marginal and gradual increase,” said Shenu Agarwal, MD and CEO of Ashok Leyland, in an interaction with Autocar Professional. To drive its market share, the company will depend on something not so obvious — strengthening their after- sales service network.
By providing exceptional customer support in a region with a large commercial vehicle user base, Ashok Leyland hopes to not only retain existing customers but also leverage the word-of-mouth factor to attract new buyers, building brand loyalty through the robust service network.
“To be able to grow in South India, the main focus is to enhance our service standards and create a very differentiating experience as far as service is concerned.” Agarwal pointed out. The company has already initiated an internal programme specifically designed to create industry-leading service delivery benchmarks. Meanwhile, it has also been making efforts to expand beyond its traditional southern stronghold. It already has plants in Bhandara (Maharashtra), Alwar (Rajasthan), and Pantnagar (Uttarakhand).
Last year, the company announced its decision to set up a manufacturing facility in Lucknow with investments totalling over Rs 1,000 crore. According to company officials, the manufacturing facility will initially have the capacity to produce 2,500 buses per year.
The company intends to gradually expand this capacity to accommodate up to 5,000 vehicles per year over the next decade, as the demand for electric and other types of buses is expected to grow substantially over the next few years. Once operational, it will become the seventh vehicle plant of Ashok Leyland in the country. However, most of its sales, and manufacturing operations, remain in the South.
The commercial vehicle major has plants at Ennore and Hosur in Tamil Nadu, in addition to a foundry in Sriperumbudur and a technical center in Vellivoyalchavadi, located in Tamil Nadu. It also has a bus manufacturing facility in Vijayawada (Andhra Pradesh).
The Ennore plant, which is spread over 121.9 acres, of which 50.7 acres is utilised by manufacturing shops and buildings, has grown to become the flagship manufacturing unit of the brand, catering to multiple segments and with diverse capabilities. It is a full-fledged plant where everything from engines, gearboxes, and axles is manufactured and buses and trucks are assembled.
Meanwhile, the Hosur plant 1, spread over 101.2 acres, has evolved into an engine assembly facility. It also has a warehouse where spares for all the plants are stored. The warehouse also serves as a distribution point for the online sales of Ashok Leyland’s spare parts business.
Hosur’s plant 2 manufactures a wide range of CVs, starting from 2.5 tonnes to 55 tonnes, all at one location. Similarly, Ashok Leyland’s bus plant in Vijayawada in Andhra Pradesh, which commenced operations in 2021, has the capacity to roll out 4,800 units per year.
The CV major’s efforts to further strengthen its position in southern India remain significant considering that the region is home to some of the most industrialised states in the country, such as Tamil Nadu, Karnataka, and Andhra Pradesh.
It also has several strong automotive bases, like the ones on the Chennai-Bengaluru industrial belt. The region is also home to many of the large OEMs, including Daimler India Commercial Vehicle (DICV), TVS Motors, Royal Enfield, Mahindra & Mahindra (M&M), Volvo Eicher, Ather Energy, Renault India, Nissan Motors, TAFE tractors, and Caterpillar.
This feature was first published in Autocar Professional’s July 15, 2024 issue.
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