Stung by falling sales in the commercial vehicles (CV) segment in the country for the first time in six years, the Hinduja Group-owned automobile major Ashok Leyland is aggressively eyeing the export markets of Africa, the Middle East, parts of Eastern Europe, Russia, and some Asian countries like Sri Lanka and Bangladesh as a derisking strategy. It is also firming up its presence in these markets by setting up facilities in some of them and acquiring companies in automotive manufacturing, components and engineering design, and is in the final stages of an acquisition in Europe in the automotive space.
Ashok Leyland, which at present exports 7-8% of its total vehicles sales, is planning to export as much as 20%.
Dheeraj Hinduja, president, the Hinduja Group and co-chairman of Ashok Leyland, told FE, ?The sector will always have four to five good years and then 12-18 months of slowdown. The derisking strategy for us is to expand our product portfolio as well as the geographies we are servicing.?
The company will also have touched a production of 1,85,000 vehicles by 2009-10, up from 84,000 at present. And the export too is expected to grow nearly six-fold to 35,000 units from the 6,025 units of exports in 2006-07.
Analysts believe that the company?s LCV (light commercial vehicles) tie- up with Nissan will give it an added export thrust, by using the latter?s widespread distribution network.
VG Ramakrishnan of Frost & Sullivan believes that if Ashok Leyland has to succeed in the international market, it will have to tweak its products to requirement of the customers there. ?The current product portfolio can only work in some of the markets. It all depends on how the company is able to translate the strengths of newly acquired company Avia and incorporate them in their products,? said he.
The company’s acquisition of Avia for $35 million would help service east European as well as some North African markets, and further acquisitions in the region would help it extend its footprint in Europe.