Ashok Leyland Limited, Chennai

The origin of Ashok Leyland can be traced to the urge for self-reliance, felt by independent India. Pandit Jawaharlal Nehru, India's first Prime Minister persuaded Mr. Raghunandan Saran, an industrialist, to enter automotive manufacture. In 1948, Ashok Motors was set up in what was then Madras, for the assembly of Austin Cars. The Company's destiny and name changed soon with equity participation by British Leyland and Ashok Leyland commenced manufacture of commercial vehicles in 1955.

Since then Ashok Leyland has been a major presence in India's commercial vehicle industry with a tradition of technological leadership, achieved through tie-ups with international technology leaders and through vigorous in-house R&D.

Access to international technology enabled the Company to set a tradition to be first with technology. Be it full air brakes, power steering or rear engine busses, Ashok Leyland pioneered all these concepts. Responding to the operating conditions and practices in the country, the Company made its vehicles strong, over-engineering them with extra metallic muscles. "Designing durable products that make economic sense to the consumer, using appropriate technology", became the design philosophy of the Company, which in turn has moulded consumer attitudes and the brand personality.

Ashok Leyland vehicles have built a reputation for reliability and ruggedness. The 5,00,000 vehicles we have put on the roads have considerably eased the additional pressure placed on road transportation in independent India.

In the populous Indian metros, four out of the five State Transport Undertaking (STU) buses come from Ashok Leyland. Some of them like the double-decker and vestibule buses are unique models from Ashok Leyland, tailor-made for high-density routes.

In 1987, the overseas holding by Land Rover Leyland International Holdings Limited (LRLIH) was taken over by a joint venture between the Hinduja Group, the Non-Resident Indian transnational group and IVECO. (Since July 2006, the Hinduja Group is 100% holder of LRLIH).

The blueprint prepared for the future reflected the global ambitions of the company, captured in four words: Global Standards, Global Markets. This was at a time when liberalisation and globalisation were not yet in the air. Ashok Leyland embarked on a major product and process upgradation to match world-class standards of technology.

In the journey towards global standards of quality, Ashok Leyland reached a major milestone in 1993 when it became the first in India's automobile history to win the ISO 9002 certification. The more comprehensive ISO 9001 certification came in 1994, QS 9000 in 1998 and ISO 14001 certification for all vehicle manufacturing units in 2002. It has also become the first Indian auto company to receive the latest ISO/TS 16949 Corporate Certification (in July 2006) which is specific to the auto industry.

Ashok Leyland has seven manufacturing plants - the mother plant at Ennore near Chennai, three plants at Hosur (called Hosur I and Hosur II, along with a Press shop), the assembly plants at Alwar, Bhandara and state-of-the-art facility at Pantnagar. The total covered space at these seven plants exceeds 650,000 sq m and together employ over 11,500 personnel.

World-class Technology:
To offer world-class technology that is relevant and affordable to the Indian customer is the philosophy that drives R&D at Ashok Leyland. Over the years, this philosophy has been translated time and again into products that seamlessly integrate international technology with local needs. "The role of R&D is central in fulfilling the company-wide commitment to total customer satisfaction" states Mr. R. Seshasayee, Managing Director, and adds that the increased infrastructural and financial support expresses the company's determination to become self-reliant in R&D.

Value to the Customer:
The immediate R&D priorities are to pro-actively address safety and environmental issues, harness and adopt technologies that provide value to the customer in an atmosphere enabling creativity and innovation. Powering those who "engineer tomorrows" with an enabling infrastructure has been top priority for the company.

Test Tracks:
But our R&D is not confined within walls. It extends to the test tracks as well. Rigorous tests are carried out under stringent simulated conditions that replicate the most treacherous landscapes.

Vehicle ruggedness and longevity are a prime customer concern, as they directly impact earnings. Ever conscious of this, Ashok Leyland makes extensive use of a modern CAD set-up, a comprehensive test track facility (where cobble-stones are calibrated and reset periodically), accelerated fatigue testing rigs and rigorous durability testing facilities. Together they ensure that there is a constant improvement in the life and on-road performance of every make of Ashok Leyland vehicle to hit the roads. Safety, durability, through our R&D efforts.

Innovations:
Ashok Leyland product development successes have come from a keen sense of anticipation and attentiveness. The company initiated research into alternative fuels well before legislative debate had even begun in the country. The result was the implementation of CNG technology ahead of the rest promising a breath of fresh air for polluted cities.

It is my pleasure to welcome you all to the 61st Annual General Meeting of your Company. I recall informing you last year, at the AGM, as to how your Company was weathering the storm of the global recession. Today, I am happy to say, that those testing and trying times are firmly behind us and we are back on a growth path. As you will see from the presentation to be made by the Managing Director, your Company’s first quarter results, though impressive, has to be viewed against the low base of the first quarter of the last fiscal which was particularly bad for the reasons explained at that time.

While many global economies are still finding the going tough, the Indian Economy has been quicker to recover, thanks to its strong fundamentals. Prudent financial management has been one of the primary reasons for achieving a GDP growth rate of 7.4% for the year 2009-2010. Going forward, we are bound to face fresh and stiffer challenges but India has come out of this crisis stronger, leaner and future-ready. Surely, it augurs for better things and times going forward.

A rapidly recovering economy, on the back of well-timed Government stimuli and RBI-funded liquidity, helped revive the Indian automotive industry. What’s heartening was the Central Government’s accent on infrastructure development that accounts for over 46% of its total plan outlay.

I am happy to share with you that your Company too has scripted its own recovery much on the same lines as the Indian Economy. Learning from the stern lessons that the recession taught, your Company has emerged stronger, more professional and future-ready.

Capacity enhancement, range expansion, diversification and spreading global footprint:
Your Company has built its growth on the four pillars of capacity enhancement, range expansion, diversification and increasing global footprint all of which have been supported by a slew of efficiency improvements, competitive product development and significant investments in high calibre human capital.

Capacity enhancement:
In March 2010, your Company inaugurated a new, state-of-the-art manufacturing facility at Pantnagar in Uttarakhand, which represents its renewed focus on the markets of North India. The largest of Ashok Leyland’s plants, it will enhance your Company’s annual installed capacity to 150,000 vehicles. The plant houses one of the most integrated manufacturing facilities in the commercial vehicle industry, with best-in-class industrial architecture combined with cutting-edge manufacturing technologies.

Another major step your Company took was to set up a globally bench-marked bus building facility at Alwar. Equipped with modern machinery, this facility is manufacturing the high-end Ultra Low Entry buses that are already running on the roads of New Delhi and other Metros.

Range expansion:
The joint venture with Nissan Motor Company, that will make Ashok Leyland a full range player, is well on course. The first products of the JV are set to roll out by mid 2011 from the existing Hosur plant and your Company will then be competing in one of the most robustly growing segments in the commercial vehicle industry. Concomitantly, your Company is continuing its efforts to acquire the land for the setting up of the greenfield facility.

Diversification:
Diversification has been the third pillar on which your Company has built its growth story. Your Company’s JV with John Deere to enter another adjacency – the construction equipment business – is also very much on schedule. The JV’s facility is fast taking shape at Gummidipoondi and, as announced earlier, pilot production will start towards the end of this year and the first product – the backhoe loader –will hit the Indian market by early 2011.