‘We are ready to take on the competition’

Murali Gopalan | Updated on January 27, 2018

Dheeraj G Hinduja

Murali Gopalan In a telephone interview from London, Dheeraj G Hinduja, Chairman of Ashok Leyland, shares the company’s roadmap. Excerpts:

How has the Hindujas’ journey with Ashok Leyland been?

Ashok Leyland was a very important acquisition for us: it was the first industrial foray for our family. In the mid/late-1980s, there was still not so much interest in India; liberalisation started a few years after that. But my father and uncle felt that the time for India was coming. This seemed to be a good investment decision because there is such an important correlation between the economy and the commercial vehicles sector.

There was a lot of apprehension about whether this would be successful since the family did not have industrial experience. We were known for our trade and finance business activities. So we brought in a technology partner, Iveco; all along, we ensured that we had the best professional management team.

Even back in the 1980s, we focussed a lot on governance. None of the family members entered the board and it was a professional management, where we appointed one or two professionals to the board as well.

Is the best yet to come?

I am sure any company will say that, but we can do so with conviction. If you look at Ashok Leyland then and now, the one big difference has been that it used to be a technologically dependent company. Initially, it was British Leyland and Hino engines, while Iveco was our partner for 19 years.

In 2007, a very bold decision was taken by our management and our family that Ashok Leyland needs to invest in its own technology and not source it from outside.

From a point where we had only 100 people in our product teams, we ramped it up to 1,000 and we invested in new ranges of engines, cabs; in the past few years, the investment has been close to $1.5 billion.

Today, the only reason I would say the best is yet to come is that when ALL was seen as a regional company or a South Indian company, our market share has grown to 31.4 per cent.

In addition, this is moving from a duopoly position in the late 1980s to today, when there are at least 6-7 powerful competitors. This has reinforced our confidence that we have invested in the right technology and taken the right moves to ensure that the company is more than ready to take on the competition.

Have there been challenges along the way?

During the evolution of any company, you always have different challenges. In 2007, when the decision was taken by R Seshasayee and his management team that it was capable and confident of developing Ashok Leyland’s own technologies, they wanted to know if the family was comfortable and willing to take that risk.

We said we were always comfortable with the management team and if they were ready, we were willing to back it with the financial resources.

This is a long-gestation industry and what you invest yields results in 4-5 years, which is true for us too. The fruits of what we invested for years are coming through today, but we did not stop. That’s because we did not want to be only Indian; we created a new vision for ourselves: to be one of the top 10 truck manufacturers and top five bus makers globally.

Published on August 14, 2016

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