Advance of Ashok: The Hinduja Group delivers a host of firsts in the GCC

Advance of Ashok: The Hinduja Group delivers a host of firsts in the GCC
Published: 10 July 2017 - 7:55 a.m.
By: John Bambridge

The UAE, and Dubai in particular, has been at pains for some years to cast itself as a platform for growth and global entrepreneurship, and it turns out that one ready ear is Vinod Dasari, CEO and MD of Ashok Leyland, the Indian commercial vehicles manufacturer and Hinduja Group company.

Four years ago, Ashok Leyland moved to establish an assembly plant in Ras Al Khaimah, and a year ago it took the further decision to move its entire international operations team from Chennai in India to Dubai, UAE.

Now the manufacturer has marked the launch of its first 3S (sales, services and spare parts) facility in Dubai, following investment by Swaidan Trading, the commercial vehicle and heavy equipment arm of Al Naboodah Group Enterprises (ANGE) and Ashok Leyland’s partner in the UAE.

The ANGE development consists of offices, a workshop and yard spread across 15,000m2 in the Al Quoz area, and represents the latest step, according to Dasari, of a systematic effort by Ashok Leyland to grow its overseas sales in the UAE, and worldwide.

Dasari explains: “We have done very well in India over the last five years. We’ve increased our market share from about 23% to about 32%, improved our financial performance, wiped out our debt and become quite profitable. However, we weren’t doing so well a few years ago, and when you look at the root cause, it is because we were too focused on India.”

Now, he notes the goal of the business is to grow outside of India, and for that purpose both the assembly facility in RAK and the 3S facility in Dubai have been established as model facilities that might be replicated by Ashok Leyland’s dealers across the globe.

Dasari continues: “In our business it’s very simple: you need to have a vehicle that performs better than the other guy, and then you need to have the service network to make sure that the vehicle continues to perform. So, we are delivering world-class product and world-class facilities in the UAE.”

On the product, he notes: “If you look at the number of new products we used to have: it was one in five years; now it’s almost one in three months — that’s the pace at which we are bringing new products into this market.

“We will have an entirely new product portfolio of trucks and buses in the GCC within two to three years, and leading this expansion is the Oyster, a premium mid-sized bus with best-in-class safety features.”

The Oyster, as the market’s first rollover compliant and front crash protected bus, is indeed a powerful indication of Ashok Leyland’s intention to not only meet but exceed local expectations.

Wholly designed by engineering teams now based in the UAE, the vehicles was also subjected to 200,000km of road tests in RAK, and has now been launched in the market by Swaidan Trading.

Dasari explains: “Historically we were only selling buses for labour transport, but now we have substantially upgraded our entire product range. The original bus was the Falcon; now there’s the Oyster.

“It was launched six months ago in Saudi Arabia, and we’ve already sold 100 units there, in a down market, and including quite a few repeat purchases — and that’s the number one indicator of success in our industry.”

Over the next six months, Ashok Leyland will also be rolling out the 8t to 15t medium-duty Boss truck. The base of this vehicle was previously sold in Prague under AVIA, but has now been re-purposed and re-tooled in India, and is bound for the assembly line in RAK.

Finally, Ashok Leyland will soon launch a 4t to 8t truck — born out of its joint venture with Nissan — called the Partner. This is a Japanese vehicle similarly re-tooled in India, and which will also be produced in RAK.

The RAK plant itself is currently in its third phase of expansion, having launched with a production capacity of four buses a day, before rising to eight and then 16 buses today, and Dasari has already approved a further doubling in capacity to 32 buses or trucks a day.

In the last fiscal year alone, running April to March, the company produced about 3,000 vehicles at the facility. The current capacity is enough to produce 6,000 vehicles for domestic markets, as well as export across the Middle East and further afield.

Both this facility and the recently opened 3S service centre and workshop have also been built to exacting standards that, in the words of Dasari, “go well beyond the requirements for the Middle East”, with a view to using them as showcase examples of assembly and service facilities that could subsequently be replicated in markets in Africa, CIS and Latin America”.

He comments: “The inauguration of this facility and launch is just one more milestone as part of our overall strategy to achieve substantial growth in international markets.”

Back in the Gulf, the Dubai service centre complements similar facilities established by Ashok Leyland across Saudi Arabia, Kuwait, Oman and Bahrain. There were two other existing 2S aftersales facilities in Dubai, but not a 3S centre also incorporating sales.

This includes a yard where “customers can come and see vehicles, pick one up, get the pre-delivery inspection done, and be ready to go”.

The investment and expansion of Ashok Leyland’s infrastructure in Dubai through its distributor, Swaidan Trading, also comes as the manufacturer’s population of vehicles in the emirates crosses the 15,000-unit threshold.

As for the wider market, he notes: “Saudi Arabia has really come down. We used to do 200 a month at one point during the peak; now we’re doing 200 a year, so it’s come down drastically. But I think Dubai is picking up.

“The overall market size in our range of products in the UAE alone is about 20,000 vehicles a year. We’re now only in 10% of that market, but we’re selling about 1,200 to 1,500 vehicles a year. So where we compete we have a nearly 70% share, and we are the leader.

“So we have a huge opportunity, and now we have the world-class product and services that we need to substantially increase where we can compete, and so increase our share.”

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