The Hindu Business Line : It is for tractors and more, says Ashok Leyland

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Chennai Feb. 16 Ashok Leyland hopes to get a foothold in the growing tractor industry by acquiring Punjab Tractors, the company's Chief Operating Officer, Mr Vinod Dasari, told Business Line today.

But asked why the company wanted to diversify into a new line of business even when there were segments of the commercial vehicles industry that the company was not present in, he said, "there is obviously more to Punjab Tractors than what I have told you."

Asked specifically if Ashok Leyland planned to build a light commercial vehicle on a tractor platform, Mr Dasari said he would not like to comment.

Mr Dasari, who met journalists on the sidelines of the annual convention of Madras Management Association (MMA), said there were a lot of synergies between a commercial vehicle and a tractor, unlike between a commercial vehicle and a passenger car.

Asked when Ashok Leyland would bring out a product in the sub 4-tonne range — a segment which is growing fast — Mr Dasari said the company was looking for the right technology. When it was put to him that the competition — Tata Motors — was walking away with the entire market with its product, Ace, Mr Dasari said Ashok Leyland was present in the full range of commercial vehicles between 7-tonne and 49-tonne and was making money.

Answering another question, he said he was not too concerned about Tata Motors joining hands with Iveco, Ashok Leyland's collaborator for over 15 years, until last year. "In 15 years, we got from them just one product (Cargo range) and that too was a failure," Mr Dasari said.

He, however, observed that Iveco might be a better fit with Tata Motors than with Ashok Leyland.

The growing competition in the Indian CV industry with new players such as M&M, Man and AMW coming in more of a challenge to the incumbent than to the new players, Mr Dasari observed. Noting that building a service network was less difficult than introducing a new product, he said that Ashok Leyland could not afford to be complacent.

Earlier, speaking at the MMA convention, Mr Dasari said the global addressable market for Indian auto components was about $34 billion, which would grow to $ 700 billion by 2015. He noted that only "mindset" was the hurdle and called upon auto components companies to think big in terms of expansion.

More Stories on : Mergers & Acquisitions | HCV/LCV/Tractors

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