The Hindu Business Line : Fundamentals strong, we’ll recover: Leyland

It was a remarkable one for Ashok Leyland for more than one reason. The company is buoyant with a host of activities: new product launches, acquiring Defiance Testing and Engineering Services, signing a JV with Finland-based Alteams for high pressure die-cast, a JV with Siemens VDO (now Continental AG) and the alliance with Nissan. All these might have happened one after the other but the process began a few years ago.

In the last two to three years, Ashok Leyland entered the second phase of growth. The first phase of growth was to build competitiveness in terms of productivity and developing skills in product development. Logically, the company has moved into the second phase where it is looking at both expansion and diversification. Expansion is both in terms of range as well as volume, and diversification in terms of special products. Now Ashok Leyland is in a decisive phase where building its competencies and capabilities takes centre stage, both locally and globally and both in capacity and range.

What are your hopes and aspirations for the new year?

Without doubt, manufacturing 100,000 vehicles has been an aspirational target for the current fiscal. As the industry witnessed a slowdown and negative growth, we had to scale down the target for the current year. However, this is a cyclical industry and I am optimistic that when it goes down, it should correspondingly go up in subsequent years. We are confident of recovery during the last quarter because the fundamentals as such are strong. The earnings are good and freight rates have not dipped and the operators are not reporting bad economics and the financing companies are not facing bad loans.

There is some delay by few companies in certain regions but overall the situation is not alarming and also there is no major concern about the economic growth. So vehicle demand should revive in the fourth quarter. Some of the dark clouds are external, with regard to the situation in the US sub-prime issues and the spillover besides appreciation of rupee against the dollar that hampers exports. Industrial growth has also been affected in the retail side due to high interest rates. These are the kind of dark clouds, but I continue to remain positive about the economy and eventually the growth in the last quarter.

More Stories on : Interview | HCV/LCV/Tractors

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page