ACKNOWLEDGEMENT

I would like to express my heartfelt

gratitude and immense respect to Prof. J

Nayak(Faculty, Marketing). I wish to thank

him for making me understand the

marketing concepts in a lucid and simple

manner and for his patience in the doubt

clearance.

COMPANY OVERVIEW:

The origin of Ashok Leyland can be traced to the urge for self-reliance, felt by independent India. Pandit Jawaharlal Nehru, India's first Prime Minister persuaded Mr. Raghunandan Saran, an industrialist, to enter automotive manufacture. In 1948, Ashok Motors was set up in what was then Madras, for the assembly of Austin Cars. Company's destiny and name changed soon with equity participation by British Leyland and Ashok Leyland commenced manufacture of commercial

vehicles in 1955.

Since then Ashok Leyland has been a major presence in India's commercial vehicle industry with atradition of technological leadership, achieved through tie-ups with international technology leaders and through vigorous in-house R&D.

Access to international technology enabled the Company to set a tradition to be first with technology. Be it full air brakes, power steering or rear engine busses, Ashok Leyland pioneered all these concepts. Responding to the operating conditions and practices in the country, the Company made its vehicles strong, over-engineering them with extra metallic muscles. "Designing durable products that make economic sense to the consumer, using appropriate technology", became the design philosophy of the Company, which in turn has molded consumer attitude and the brand personality as a whole.

Ashok Leyland vehicles have built a reputation for reliability and ruggedness. The 5,00,000 vehicles we have put on the roads have considerably eased the additional pressure placed on road transportation in the independent India.In the populous Indian metros, four out of the five State Transport Undertaking (STU) buses come from Ashok Leyland. Some of them like the double-decker and vestibule buses are unique models from Ashok Leyland , especially tailor-made for high - density routes.

In 1987, the overseas holding by Land Rover Leyland

International Holdings Limited (LRLIH) was taken over by a joint venture between the Hinduja Group, the Non-Resident Indian transnational group and IVECO. (Since July 2006, the Hinduja Group is 100% holder of LRLIH).The blueprint prepared for the future reflected the global ambitions of the company, captured in four words: Global Standards, Global Markets. This was at a time when liberalisation and globalisation were not yet in the air. Ashok Leyland embarked on a major product and process upgradation to match world-class standards of technology.

In the journey towards global standards of quality, Ashok Leyland reached a major milestone in 1993 when it became the first in India's automobile history to win the ISO 9002 certification. The more comprehensive ISO 9001 certification came in 1994, QS 9000 in 1998 and ISO 14001 certification for all vehicle manufacturing units in 2002. It has also become the first Indian auto company to receive the latest ISO/TS 16949 Corporate Certification (in July 2006) which is specific to the auto industry.

Ashok Leyland has six manufacturing plants - the mother plant at Ennore near Chennai, two plants at Hosur (called Hosur I and Hosur II, along with a Press shop), the assembly plants at Alwar and Bhandara. The total covered space at these six plants exceeds 450,000 sq m and together employ over 11,500 personnel.

ENNORE

HOSUR UNIT-1

BHANDARA

HOSUR UNIT-2

HOSUR UNIT-2A

ALWAR

RESEARCH AND DEVELOPMENT (R&D)

R & D

World-class Technology

To offer world-class technology that is relevant and affordable to the Indian customer is the philosophy that drives R&D at Ashok Leyland. Over the years, this philosophy has been translated time and again into products that seamlessly integrate international technology with local needs. "The role of R&D is central in fulfilling the company-wide commitment to total customer satisfaction" states Mr. R. Seshasayee, Managing Director, and adds that the increased infrastructural and financial support expresses the company's determination to become self-reliant in R&D.

The immediate R&D priorities are to pro-actively address safety and environmental issues, harness and adopt technologies that provide value to the customer in an atmosphere enabling creativity and innovation. Powering those who "engineer tomorrows" with an enabling infrastructure has been top priority for the company.

But the company’s R&D is not confined within walls. It extends to the test tracks as well. Rigorous tests are carried out under stringent simulated conditions that replicate the most treacherous landscapes.

Vehicle ruggedness and longevity are a prime customer concern, as they directly impact earnings.

Test Track

Value to the

ASSOCIATE COMPANIES:

AUTOMOTIVE COACHES & COMPONENTS LTD  (ACCL) ACCL was promoted by Ashok Leyland and the Tamil Nadu Industrial Development Corporation (TIDCO) in the 1980's. It has two Divisions:

ACCL Division ACCL is the largest Tipper Body manufacturer in the organised sector in India, with its plant at Gummidipoondi, Tamil Nadu. Since 1987, ACCL has been offering its customer in India and abroad, well engineered afterchassis solutions: bus bodies,front-end structures(FES), tankers, aluminum containers, OB vans, energy vans and the like, apart from tippers.

Over the years, through timely technology induction, ACCL has perfected the art and science of high quality body building. ACCL has built over 18,000 tippers and 24,000 FES.

PL Haulwel Trailers (PLHT)(A Division of ACCL)PL Haulwel Trailers Limited (PLHT) manufactures a wide variety of after-chassis products, including

- Fifth Wheel Couplers and Hoists - 2 and 3.5 fifthwheel couplers, adjustable couplers, double oscillating couplers, fifth wheel tip hoists- Semi Trailers - Flat beds (Skeleton /platforms), Semi low beds, Low beds and Full trailers upto 100T capacity- Container trailers- Ladle Carriers, for foundries (Steel / Aluminum )- Running gears for LPG tankers- Tipping semi trailers upto 35T capacity

- Car / Truck / Tractor Carriers- Bottom dumpers- Container sideloaders / transporters under collaboration from HAMMAR MASKIN AB,on rigid and semi trailers- All types of user-specific custom-designed trailers for niche applications

Apart from the above, which are manufactured at the existing two production centers at Pondicherry and Chennai, PLHT also has entered into marketing arrangements for hydraulically force-steered axle trailers from Comet to spa, Italy and for Roll Hydro from Hydro 7 Industries, France.

Through design and manufacturing skills in after-chassis products, PLHT has established a market not only within India but also in the neighboring countries - Sri Lanka, Bangladesh, Nepal, Vietnam and Myanmar

PLHT would be focusing on after-chassis products as a distinct business and intends to introduce a variety of application specific after-chassis products through strategic alliances with reputed overseas manufacturers in the field.

L ANKA ASHOK LEYLAND

Established in 1982, this is a joint venture between Ashok Leyland and the Government of Sri Lanka. Equity holding of Ashok Leyland Ltd. in the joint venture is 28%. Ashok Leyland supplies chassis in both completely built-up and knocked down conditions to Lanka Ashok Leyland, which in turn assembles the chassis and builds bodies, as the case may be, and sells them in the local

market. The factory is situated at Panagoda, about 40 Kms from Colombo.

This company is fully managed by Sri Lankan professionals. Lanka Ashok Leyland has also established a fully owned subsidiary called Lanka Ashok Leyland Services, which takes care of marketing and after-sales service including sale of spares.

HINDUJA FOUNDARIES

Established in 1959, Ennore Foundries is India's largest automotive jobbing foundry with production capacity of 45,000 MT in Grey Iron and 3000 MT in aluminum gravity die castings per annum. Certified to ISO - 9001 and QS 9000 Quality systems. Ennore Foundries is also largest manufacturers of Cylinder Block and Cylinder head castings in India catering to different segment like automobiles, tractors, industrial engines and power generators, product ranging from 10 kg to 300 kg in Grey Iron casting and up to 16.5. kg in Aluminum gravity die casting.

Capability to adapt to emerging trends and absorb new technologies, competent engineering skills and expertise, a strong metallurgy base, uncompromising quality consciousness and dedicated team work have all contributed to create a sound and solid base for Ennore Foundries in the foundry industry.

With these systems in credit, Ennore Foundries is always ahead of customer needs.

Ennore Foundries major customers are:

- Ashok Leyland Ltd.

- Hyundai Motor India Ltd.

- Maruti Udyog Ltd.

- Hindustan Motors.

- Mahindra & Mahindra.

- Simpson.

- Caterpillar.

- Swaraj Mazda.

- Tafe

IRIZAR-TVS

Started in 2001, IRIZAR-TVS is a joint venture between Ashok Leyland, TVS & Sons Ltd and IRIZAR, the internationally reputed bus body builder from Spain. This joint venture addresses the growing demand for luxury coaches in the country. As a preferred supplier to Ashok Leyland, IRIZAR-TVS provides a platform for Ashok Leyland to introduce new bus body concepts and designs even as it heralds the pioneering concept of fully built buses of international luxury standards from an Indian vehicle manufacturer.

The company will be shortly launching the InterCentury Bus based on AL passenger chassi

ASHOK LEYLANDS PROJECT SERVICES LIMITED

Ashok Leyland Project Services Limited (ALPS), spearheads the project development activities of the Hinduja Group in India. Apart from assisting the investment entities of the Group identify and implement successfully projects in India, ALPS also provides professional services to help international companies interested in projects in India. Through its pool of multi-sector professionals (in areas such as power, telecommunications and surface transport infrastructure), ALPS adds the Indian element to the multinational company or consortium. This company provides specialised services for undertaking pre-investment, project development which includes feasibility studies, appraisals, development of joint ventures, company formation and other professional services that are designated to deliver project opportunities from concept to commissioning.

ALPS provides related services on request for specialised inputs to assist in the profitable and economic implementation of projects in close co-operation with promoters and designated shareholders. In certain cases, the Company provides negotiated equity on behalf of the Ashok Leyland/Hinduja Group as commitment to the sustained results of its services. The Company has developed projects at various stages of implementation relating to power generation, airport construction, and transportation including air cargo transportation, development of roads, airports and associated infrastructure.

Through its multi-sector industry knowledge - both in the Indian and international context - ALPS plays a

significant role in providing ideas and suggestions, that are based on internationally accepted and proven practices and systems, towards the formulation of reforms and policies in various industry sectors in India

CORPORATE PHILOSOPHY

We believe that our impressive strides in the marketplace stem in equal parts from our proactive approach and our customers' unstinting support, earned the only way we know: by giving our customers the most appropriate transport solutions for each of their applications, and by backing them up with consultancy, finance, driver training and a responsive after-market network. We are conscious of the fact that vehicles are more than just a means of transporting people and goods; we understand that they have a deep and far-reaching impact on society, the national economy and the environment.

We have, therefore, always endeavored to engineer products and systems that promote progress on all these fronts. We firmly believe that this honest approach will make the Ashok Leyland marquee the symbol of the very best in transportation, today and tomorrow.

The five AL values are:

International Speedy Value creator Innovative

Ethical

VISION AND MISSION OF ASHOK LEYLAND LTD

Vision:

Achieving leadership in the medium/heavy duty

segments of the domestic commercial vehicle market

and a significant presence in the world market through

transport solutions that best anticipate customer needs,

with the highest value-to-cost ratio.

Mission:

Identifying with the customer

Being the lowest cost manufacturer

Global benchmarking our products, process and

people

PRODUCT MIX OF THE COMPANY:

BUSES:

Leaders in the Indian bus market, offering unique models such as CNG, Double Decker and Vestibule bus.

Viking BS - II Viking BS - IIIViking BS II

Viking SLF BS-III Viking CNG BS-III 12 M Bus - BS II

Cheetah BS - II 12 M Bus BS-II Cheetah BS-III

Cheetah BS - II Panther BS - II Lynx BS-II

Vestibule Bus - BSIII

Double Decker Airport Tarmac coach

TRUCKS: Pioneers in multi axle trucks and tractor-trailer

4 X 2 Haulage Models 4 X 2 and Multi-axle Tippers

Multi-axle Vehicles

TractorsEcomet

ENGINES:

Diesel engines for Industrial Genset and Marine applications, in collaboration with technology leaders

Engine Dealerships

Genset Application

Engines ranging from 15KVA to 250KVA

>Industrial Segment>Hospitals / Clinics>Commercial /

Residential Complexes

>Theatres>Shopping mall /

Offices>Rice Mills>Hotels / Restaurants

Industrial Application

Engines with power rating from 40PS to 200PS.

>Front End Loaders>Excavators>Compactors>Pavers>Road Sweepers

>Harvestor Combines>Compressors>Cranes>Pumps

Marine Application

Engines with power rating from 58PS to 193PS

>Trawlers, Pure -Seiners, Gillnetters

>Sailing Vessels>Marine generating

sets>Pavers

>Speed Boats>Passenger Launches>Ferries>Auxiliary drive in

Vessels

DG Sets for exports

Diesel and Natural Gas gensets trom 15KVA - 250KVA

>Industrial Segment>Hospitals / Clinics>Commercial /

Residential Complexes

>Theatres>Shopping mall /

Offices>Rice Mills>Hotels / Restaurants

 

DEFENCE:

Largest provider of logistic vehicles to the Indian army. 

Special Vehicles Defence Vehicles

SEGMENTATION:

Ashok Leyland Limited is the second largest commercial vehicle company in India in the medium and heavy commercial vehicle (M&HCV) segment with a market share of 28% (2007-08).

With passenger transportation options ranging from 19 seaters to 80 seaters, Ashok Leyland is a market leader in the bus segment.

The company claims to carry over 60 million passengers a day, more people than the entire Indian rail network.

In the trucks segment Ashok Leyland primarily concentrates on the 16 ton to 25 ton range of trucks. However Ashok Leyland has presence in the entire truck range starting from 7.5 tons to 49 tons.

The Medium & Heavy Commercial Vehicles SectorCommercial Vehicles (CV) broadly fall into two categories-- light segment (LCV- less than 7 tonnes weight) and medium and heavy segment (M&HCV- over 7 tonnes). M&HCVs are used for long distance transportation of people, agriculture produce, capital equipment and some industrial raw materials. Growth in this sector is dependent on the general economic trend, development of infrastructure projects, transport economics, availability of freight, replacement period of vehicles, availability of credit and favourable government policies. Since the industry competes with the railways for several categories of cargo, railway performance is an important determinant of commercial vehicle sales. Historically, demand in the Rs. 27000cr M&HCV industry has been cyclical, 3-4 years of growth followed by 2-3 years of stagnant sales and recession, with around 6% CAGR over the last decade.In recent years, the Government’s thrust on infrastructure and Supreme Court’s ban on overloading of trucks have been the growth impetus for the CV industry. In 2006-07, the M&HCV segment clocked sales of 294,266 vehicles, a strong growth of 34% YoY. The export market contributed 22% to these numbers.The market shares (as of March 2007) of dominant players in the M&HCV sector are:

M&HCV Passenger Carrier Segment

Tata Motors47%

Ashok Leyland41%

Eicher Motors6%

Swaraj Mazda5%

Volvo India1%

Market Share

M&HCV Goods Carrier Segment

Tata Motors65%66%

Ashok Leyland26%

Eicher Motors7% Swaraj Mazad

1%

Market Share

In May 2007, M&HCV passenger carrier segment registered strong 40% growth in sales YOY. However, the M&HCV goods carrier segment registered a sharp 14.2% decline. This segment is very sensitive to interest rates as more than 95% vehicles are financed. Interest rates have almost doubled to 13-14% from 7.5 8% last year. There are continuing concerns on input cost increases due to commodity price movements, together

with cost increases due to improvements in product designs and upgradation to meet emission norms.In the near future, competition in this sector is likely to intensify with the entry of more multinationals. Development of new infrastructure projects, coupled with movement of construction material in the upcoming mega SEZs , enforcement of rated payload regime and with stricter emission norms, will keep the growth in demand intact. The potential of demand for replacements is high as well, with over 35% of existing fleet over 10 years old.

SWOT ANALYSIS:

Strength

The company is punctuated by a number of technological innovations like multi-axed trucks, full-air brakes and rear engines.

Partnership with global players like Nisan Motors, Hino Motors to serve with the technologies best of their kinds.

Profitable track record gaining investor’s confidence.

In spite of stiff competition in M&HCV, its high return on investments.

Weakness

Nisan Motors having the holding of 49% of its stocks, which cuts downs it opportunities to strategize as per Indian scenario.

The hybrid vehicles and low emission vehicles capturing the market share which the company

hasn’t duplicated or came up with any new innovation.

The company’s profile of wide range of operations resulting in brand dilution if a single segment do badly in the market.

M’ Porter’s Five Force Model:

As such Tata Motors is the having the highest market share in the country but Ashok Leyland has been the market leader in buses segment over years.

The major players in the market are the threat to the company; there are high entry barriers for new entrants like Volvo who is trying to enter the goods carrier segment.

The substitutes are basically the hybrid electric vehicles and the low emission vehicles giving a stiff competition to the company.

The bargaining power of suppliers is considerably low as the company follows the partnership mode where the tier 1 suppliers have less opportunities as compare to the tier 2 and tier 3 suppliers. But overall the bargaining power of suppliers is low because of the company being at commanding position.

THE BCG MATRIX:

Industry Competit

ors

Intensity of Rivalry

Substitutes

New Entrants

Suppliers

Customers

Bargaining Power

Bargaining Power

Barriers to entry

Threat of Substitutes

BUSINESS GROWTH RATE

# Light Commercial Vehicles (LCV)

# Tier 1 supplier

# Tier 2 supplier

# Tier 3 supplier

# Hybrid Electric Vehicles

# Volvo (Goods Carrier)

H-series engines

Ecomet range of trucks

Iveco engines

Marine Diesel engines

Luxura

Viking BS-I - city bus

Tusker Gold 2214 (6X2)

LOW

HIGH

HIGH

The present:

Ashok Leyland, a flagship company of The Hinduja Group, is engaged in manufacturing and marketing of commercial vehicles. The company manufactures trucks, buses, defence vehicles and engines

It primarily operates in Asia.The company is headquartered in Chennai, India and employs about 11,940 people.

The company recorded revenues of INR59,810.7 million ($1,305.1 million) during the financial year ended March 2009 (FY2009), a decrease of 22.8% compared to FY2008.

The operating profit of the company was INR3,406.4 million ($74.3 million) in FY2009, a decrease of 51.4% compared to FY2008. Its net profit was INR1,900 million ($41.5 million) in FY2009, a decrease of 59.5% compared to FY2008.

Achievements

At 60 million passengers a day, Ashok Leyland buses carry more people than the entire Indian rail network

Ashok Leyland has a near 85% market share in the Marine Diesel engines markets in India

MARKET SHARE

In 2002, all the vehicle-manufacturing units of Ashok Leyland were ISO 14001 certified for their Environmental Management System. First time in Indian commercial vehicle industry

In 2005, received the world-renowned BS7799 Certification for its Information Security Management System (ISMS) - first time for an auto manufacturer in India

In 2006, received the coveted ISO/TS 16949 Corporate Certification – first in Indian auto industry

It is one of the leading suppliers of defense vehicles in the world and also the leading supplier of logistics vehicles to the Indian Army.

The future:With a strong GDP numbers for next few quarters and NHAI road development programs, commercial vehicles sector in India is poised for strong growth in the years to come.Along with this, Supreme Court order on overloading of trucks will also fuel demand for loading commercial vehicles in the country even though rising interest cost would impact sales volume in the short term.

To take advantage of the market growth, ALL is setting up two manufacturing units at a cost of Rs 250 crore.

One will make engines for heavy commercial vehicles and the other Gearboxes.

It is also introducing a VRS to cut down the work force at its plant at Ennore in Tamil Nadu from 5,000 to 4,250.

The company is also planning to make the H-series engines at the Ennore plant with a total planned capacity of 40,000 engines at a cost of Rs.150 cr. and the commercial production will start by 2007. ALL is expanding its CV facilities and is setting up a new facility in Uttaranchal to avail tax benefits.

Increased competition from the entry of foreign truck majors like Man, Navistar and Isuzu may impact its market share and demand high investment in technology.

On long-term basis, ALL is implementing de-risking strategies whereby one-third of its sales would accrue from non-cyclical businesses; these include defence, exports and auto engine and spare parts.

The success of this strategy would stabilize the company’s topline.Company being in a profitable state, would continue to grow irrespective of the fluctuating market condition

BIBLIOGRAPHY

Google

www.ashokleyland.com

marketing management (Philip Kotler)