Vinod Dasari, the managing director and CEO of Chennai-headquartered Ashok Leyland, the country’s second largest commercial vehicle manufacturer, will always be celebrated in the industry as the turnaround man. He had joined the company in 2005, and took over as the managing director in 2011 when it was at its lowest ebb.
Vinod Dasari, the managing director and CEO of Chennai-headquartered Ashok Leyland, the country’s second largest commercial vehicle manufacturer, will always be celebrated in the industry as the turnaround man. He had joined the company in 2005, and took over as the managing director in 2011 when it was at its lowest ebb. The company’s balance sheet was a nightmare, with Rs 7,000 crore of debt, a debt-to-equity ratio of 2.4:1, huge fixed cost and bad pricing. There were 10 new competitors who were global companies. To add to all this, the commercial vehicle industry was going through a free fall between 2012 and 2014. The bad days, however, are firmly behind the company. It has experienced double-digit growth for 13 quarters continuously. Ashok Leyland, in fact, reported a net profit of Rs 450 crore for the quarter ended December 31, 2017—it was Rs 162 crore for the same period a year ago. Its revenues have grown 58%, at Rs 7,113 crore, and working capital position continues to be very healthy. I want to ask Dasari what the future holds for the company after its spectacular comeback, as these are interesting and exciting times for the Indian automobile industry. It takes some persuasion to get him out for lunch, as he would rather have it in Ashok Leyland’s corporate dining room. We finally meet at the Madras Pavilion, at the ITC Grand Chola, as it is easily accessible from his office. It offers Indian and international food round the clock. We decide to have fresh orange juice before we choose from the very large buffet.
“The competitor had said they would bury us,” Dasari tells me. “I decided to leverage on the downturn.” The way he motivated the staff is fast becoming one of Ashok Leyland’s corporate legends. While addressing the employees when he took over, he decided to belt out a rousing Rajinikanth song from one of the superstar’s blockbusters. But Dasari does not speak Tamil language. How did he do it? “I learnt all the lines by heart and the meaning of the words. Everybody wanted an encore. The second time round, people were on their feet, singing and dancing,” he grins. Now he has to sing it during every Ashok Leyland gathering. Serious efforts at cost-cutting, such as downsizing, getting rid of subsidiaries which were not adding value, and a slew of other measures helped the company ride through the “perfect storm,” as Dasari calls the difficult days. “We designed the maximum number of new products during the downturn. Our network was increased from 200 outlets to 1,200 outlets all over India. If we can’t get a vehicle up and running in 48 hours, we pay the owner Rs 1,000 per day as a penalty,” he says. We help ourselves to a few interesting sounding appetisers. Dasari wants to try Asian shrimp fritters, and I take paneer aloo bukhara and flying saucers (mini idlis filled with spicy mushroom, tossed in podi and ghee).
I ask him about Ashok Leyland’s first electric bus with the swappable battery technology of Sun Mobility, which was unveiled at the Auto Expo 2018 in February. Ashok Leyland and Sun Mobility had announced their collaboration last year. Designed for Indian conditions with a seating capacity of 25-35 seats, the electric bus runs on easily swappable, smart batteries that are small and one-fourth the weight of a regular lithium-ion battery. “This is certainly not jugaad. We showcased the vehicle refuelling process in the electric buses in which the battery is separated from the bus. The electric buses get swapped in 2.28 minutes, much faster than conventional refuelling, along with the swapping of bus drivers and conductors at a depot. By separating the battery from the vehicle, you only pay for the energy used, similar to the current diesel fuel system.” Dasari says that Ashok Leyland has always had innovative skills in its DNA. “Don’t you remember we were the first ones to introduce power steering in the country?” he says.
The buffet offers a cold antipasti, with a “make your own” salad bar. I make mine with some vegetarian one-bite wonders, orange and beet, sweet potato and bell peppers. Dasari helps himself to a small portion of Ambur chicken biryani. “The Indian automotive industry is the fastest in the world to adopt both emissions and safety regulations. We will move from BS-4 to BS-6 in three years,” he says. Ashok Leyland has developed iEGR (or intelligent Exhaust Gas Recirculation) BS-4 technology specifically for emerging markets like India. The world uses SCR (Selective Catalytic Reduction) systems.
Dasari reels of a whole lot of technical details about iEGR. Its efficient exhaust and combustion system results in 10% better fuel-efficiency than BS-3 engines in some applications. It has no additional sensors or complex electronics, and shares many common parts with BS-3 engines. “If you’re looking for a hassle-free transition from BS-3 to BS-4, then iEGR is the most ideal BS-4 technology for your business,” he says. “The industry sneered at us. We ourselves own an SCR services provider. We believe in designing something for India by Indians adding intelligence.” I discover that Dasari is a true believer in the India story. “Economy will continue to be strong. One of the takeaways from the Union Budget is that rural economy will run the state. Uttar Pradesh today is one of the fastest growing states in the country. We sell more trucks there than all the four south Indian states put together. The chief minister is not allowing overloading of vehicles. Farmers have cash. GST, focus on infrastructure and the rural economy will drive growth,” he adds.
For dessert, there are more than 20 sweets to choose from. We settle for a scoop of classic home-made vanilla ice-cream. I ask him what is going on with electric vehicles. “It will happen in India. It is simply a question of when. Large electrical buses have to be heavily subsidised by the state. Once the price of the battery comes down and the government says we will switch to electric vehicles, growth will be fast.” Dasari constantly thinks outside the box. “The major component for the electric vehicle battery is lithium-ion. China is the largest producer of these batteries. It is not wise to depend on a single supplier. We must explore alternatives like fuel-cell technology. It is at a nascent stage, but is worth pursuing seriously. We can use solar and wind power.” As we leave, I ask him will Ashok Leyland ever get into passenger cars. His answer is a firm “no.”