Ashok Leyland in the Arab World
Ashok Leyland in the Gulf Region Ashok Leyland dominates the bus market in the Gulf, and exports around 2,000 buses to the Gulf region every year. It also operates a Regional Parts Warehouse and Customer Support Centre in Sharjah, UAE. Based on the huge success of its Falcon buses, it plans to set up a bus assembly unit in Ras Al Khaimah, UAE, with an initial capacity of 1,000 units.
Ashok Leyland in Other Arab Countries Ashok Leyland has also been active in other Arab countries, notably in Egypt, Iraq and Iran. It has been assembling trucks and buses in Egypt for over 10 years in collaboration with Engineering Automotive Manufacturing Company. It has been a regular exporter of diesel engines and other automotive components to Iran for many years.
Company Background
Ashok Leyland is the flagship company of the Hinduja Group. It is headquartered in Chennai, India.The company manufactures a wide range of trucks, buses, engines and defense and speciality vehicles. It is the second-largest manufacturer of commercial vehicles in India with a production volume of over 80,000 vehicles per year.
Ashok Leyland has six manufacturing plants located throughout India –at Ennore near Chennai, three plants at Hosur and one each at Alwar and Bhandara. It has five associate companies – Automotive Coaches & Components Ltd, Lanka Ashok Leyland, Ashok Leyland Project Services Limited, Ennore Foundries and IRIZAR-TVS.
Ashok Leyland’s total income increased from US$ 1 billion in 2004-05 to US$ 1.2 billion in 2005-06. It has around 12,000 employees (as on 31 March 2006).The company exports its products to more than 40 nations across Asia, the Middle East and Africa. It has a significant presence in some countries in these regions;
it holds a 70 per cent market share in the bus markets of Mauritius and Dubai, and in the 7-16T goods and passenger segment of Sri Lanka.
The company supplied 3,322 trucks to Iraq under the United Nations Oil for Food programme, thereby executing the single largest order for Indian commercial vehicles.This increased the company’s export sales in 2004-05, as seen in the figure below.
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ASHOK LEYLAND LIMITED
Source: Company Website
Number of Vehicles
Sales Break-up of Ashok Leyland (2001-2006)
2001-02 2002-03 2003-04 2004-05 2005-06 0
10,000 20,000 30,000 40,000 50,000 60,000
Sales Domestic Year
Sales Exports
exported to other countries in Africa, Middle East and Latin America.
Ashok Leyland also targets a number of acquisitions in domestic and overseas markets to expand its business.The company plans to further ramp up its R&D activities for global competitiveness.
Factors for Success
Exploring New Markets by Winning Major Contracts
In 2004-05, Ashok Leyland supplied 3,322 trucks worth US$ 46 million to Iraq, which was the largest single order for Indian commercial vehicle manufacturing.This deal was a part of the United Nations Oil for Food Programme to reconstruct Iraq after its war with the US. Ashok Leyland is currently negotiating other contracts in the region to increase its presence in the Arab countries.
Focus on R&D Operations
Ashok Leyland endeavours to integrate
international technology with customer needs at competitive prices. It has invested heavily in latest R&D facilities in Chennai and Hosur.
The company’s R&D team ensures better safety, durability and on-road performance for its vehicles.
It is a pioneer in vehicles powered by alternative fuels, using CNG and hybrid engines for reducing pollution. A strong emphasis on R&D and
innovation has helped Ashok Leyland to provide added value to its customers and propelled the company’s success.
Future Plans
Expansion in the Arab World
Ashok Leyland discerned a huge demand for buses in the Middle East and signed a Memorandum of Understanding with Ras Al Khaimah Investment Authority to set up a bus assembly facility in the UAE.The company plans to employ 450 personnel and invest US$ 5 million in the initial phase of this project, which is expected to produce 1,000 units every year.
Ashok Leyland has recently acquired AVIA Trucks in Czech Republic – renamed AVIA Ashok Leyland Motors, which will give it a strong presence in the European Truck market.These trucks will also be
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