Ashok Leyland on a journey to move up the value chain

Business Economy Finance
(Last Updated On: September 5, 2016)

Commercial vehicle maker Ashok Leyland has drawn up a holistic game plan to usher in a fresh transformation to not only stay healthy as a company in the context of emerging market dynamics but also move up in value graph.

Sketching out the details of the new thought process, Managing Director Vinod K Dasari asserted that the Hinduja flagship company had to undergo a metamorphosis yet again. “If we don’t transform once again, we will struggle as a company,’’ he made it very candid.

Change culture

The fulcrum of the new change process would revolve around what he called 3Cs – capability to differentiate, change culture and change capacity.

In terms of market share, balance sheet and financials, the company was now on strongest wicket ever in its history following a ‘transformation journey,’ he claimed. This should be read in the context of near-financial doldrums it faced a few years ago, he pointed out. Cautioning against letting complacency to set in, he said the challenge before the company now was to motivate the team across verticals to sustain the movement up the growth curve.

Stating that a serious effort was under way to bring in a change in the culture of the organisation, Mr. Dasari said the focus was on understanding and re-defining the core value of brand Ashok Leyland in the emerging competitive environment. The brand stood for a value system and the company went aggressive to pursue its target, he said.

“However, we won’t do that by stepping on others,” he pointed out. “A vehicle is capital for anybody who buys it. And, he buys it if it is profitable for him,’’ he put it matter-of-factly. Given this, the task before the company was one of findings ways “to live the brand,” he added.

 Brand value

Ashok Leyland had sought the help of Interbrand, a global agency, in reinventing the core value of its brand, he said. As part of the `change culture’ initiative, the focus was on building a leadership pipeline, he said. Also, the thrust would be on doing things fast and doing things that “we trust” in an empowered environment with focus on three simple things – market share, profitability and cash, he said.

With customers having multiple options in the modern day, the thrust would necessarily be on how to beef up their earning potential by deploying the right network, he said.

In this context, Mr. Dasari hinted that Ashok Leyland would expend considerable time, energy and money on coming out with modular products to usher in an environment that facilitated mass customisation. With electronics set to play ever increasing role in automobile, “the clock speed has gone up for the entire ecosystem” and “thinking India is both challenging and exciting,” he pointed out.

Emphasising the need to move away from the “push system” to the “pull system,” he said there was a compelling need – given the cyclical nature of the commercial vehicle industry – to look at ways of growing non-truck business. In the age of extensive digitisation, this required strengthening the interface mechanism with the roadside mechanics as well, he pointed out. As it embarked on changing its DNA, Ashok Leyland would, nevertheless, remain committed to its core activity i.e. of moving things, he made it clear.

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