Ashok Leyland confident about better times ahead

Murali Gopalan Even as India continues to report record Covid-19 infections everyday, Ashok Leyland’s MD and CEO, Vipin Sondhi, would rather see the brighter side.

“Every quarter going forward should be better than the previous one… which also then precludes the fact that we must endeavour not to have another lockdown in a blunt manner,” he says.

‘Make peace with the virus’

In Sondhi’s view, there is no other option but “to brave it through and make peace with the virus” since it is here to stay. At the same time, as some States have done, containment zones must be “very narrowly encapsulated” so that this drive is restricted to small areas.

“The biggest stimulus to the economy comes from normal life when people head back to work. On that assumption, every quarter being better than the preceding one will revive the whole feeling that we are getting better and the worst is over,” says Sondhi.

As he puts it, lockdowns which are blunt take away the edge, and an industry like auto is “only as good as the value chain” in which it rests, comprising suppliers, dealers, financiers and customers. If “any of these pieces” get impacted because of a partial lockdown in any part of the country, the value chain comes to a semi-halt.

“What we want is focussed, narrow containment zones to isolate areas which may be affected,” says Sondhi. The good news is that things are gradually coming back on track. “Clearly, lives comes first, and livelihoods also determine lives…so a phased opening up is very important with very finely tuned containment zones.”

For now, light commercial vehicles (LCVs) are seeing stronger growth thanks largely to e-commerce mobility dynamics where instant supply chains have “come out of nowhere”. Additionally, tippers are doing well, which is welcome news in the medium and heavy space.

As for plotting a de-risk strategy, Sondhi explains that supply chains are “remarkably interconnected” and, in the global context, the need of the hour is to see how they become “closer and closer” to the geographies concerned. By the end of the day, automakers could be looking at their supply chains and evaluating challenges from exposure to one region/country.

For India to capitalise on the opportunity, there are a host of things that need to be done. As Sondhi says, anybody investing in India for the first time looks for stability in policy and readily available infrastructure in terms of land, water, electricity, schools and hospitals.

“That is the red carpet which we talk about. You plug in and start playing instead of running around for permissions on land, water, electricity, roads, etc. This is all we need to do…you don’t need to invite people, they will come to you,” he adds.

Modularity

Sondhi is clearly excited about AVTR, Ashok Leyland’s recently introduced modular truck platform. “Modularity for us really is the front-end which remains identical right across as also the back-end…it is the middle portion that you play around with,” he says.

More importantly, this helps from a manufacturing standpoint: the chassis is all neat, clean and identical regardless of what is being ordered. Two, continues Sondhi, it reduces the number of parts on the shop floor. “Your supply chain becomes easier for the supplier, and your dealer/warehouses see a reduction in the variation of number of parts. This is what modularity is all about.”

While this can work in the medium and heavy space, for a LCV to be modular is tough because of large volumes. Modularity comes “when you have medium-sized volumes” and that is when it is most effective. Standardisation, on the other hand, plays a larger role when volumes increase.

“It also gives us the opportunity to take AVTR confidently to overseas markets,” says Sondhi. It is designed for both right- and left-hand drive, which means servicing regions “most natural to India” such as West Asia, Africa, CIS (Commonwealth of Independent States) and, in the future, ASEAN, too.

During April-June, Ashok Leyland “engaged very closely” on dealership training for AVTR, right down to the last service engineer and salesperson, on the benefits of modularity. “We have set up quick response teams in each region, where a service engineer, salesman and design engineer respond to any question from a customer and solve it right there.”