The Hinduja Group is expanding its base in India and abroad to enhance its product offerings in tune with its strategy to radically boost its automotive business and enter the aerospace sector. In 2008, the group, which has integrated all its automobile-related businesses under holding company Hinduja Automotive, had appointed V. Sumantran as executive vice chairman of Hinduja Automotive to catapult it to the position of a major player in the automotive sector.
This move seems to have paid off with Sumantran, who had earlier worked with General Motors and Tata Motors , chalking out a growth strategy with Hinduja group veteran R. Seshasayee.
Ashok Leyland, the flagship company known mostly as a truck and bus maker, is broad-basing its products through joint ventures (JVs) and acquisitions to compete with domestic and multinational players in the Indian market.
"We have created a separate entity for defence sales and have seen improved results. The defence segment is non-cyclic and is a huge market. We are also entering into aerospace and will make an announcement within four months," Sumantran said. He, however, declined to divulge more details of the aerospace business as talks were at a preliminary stage.
"Defence is the thrust area and we are expanding our products through two joint ventures that will start rolling out vehicles later this year," he said. Ashok Leyland has set up a JV with Nissan Motor Company to manufacture light trucks called Ashok Leyland DOST. This is the first time that the company is entering into the light commercial vehicles (LCV) segment, which the Tatas dominate.
The company has also formed a JV with John Deere Construction & Forestry Company of the US to manufacture earthmoving equipment in India. This company will produce backholes and wheel loaders that are in huge demand because of the rapid growth in infrastructure. Ashok Leyland is concentrating on the armed forces of India as well as other countries.
Recently, it showcased its models for the defence forces in the UAE to encouraging response. The Hindujas, who have been active in the Middle East for several decades, have developed special vehicles for the armed forces, including light recovery vehicles, high mobility vehicles, field artillery trucks and fire fighting trucks, to name a few.
The modernisation programme of the Indian army has created huge opportunities for truck makers and Hindujas want to encash on it now. The automotive business is led by Gopichand Hinduja's son Dheeraj Hinduja. Both father and son are co-chairmen in the company.
The defence and exports thrust seems to have yielded good results as Ashok Leyland sold 94,105 vehicles in 2010-11 as compared to 63,926 vehicles in the previous year. This is a rise of 47 per cent.
In 2010-11, Ashok Leyland exported 10,306 vehicles compared to 5,979 units, up 72 per cent. Ashok Leyland which has also built a lot of capabilities in the enterprise resource planning (ERP) and IT services domain is strengthening group firm Defiance Technologies to provide these services to players in the manufacturing, logistics and services sector. It has tied up with leading firm Epicor on this front.
With so many initiatives Sumantran believes that Hinduja Automotives would emerge as a strong global player.
Courtesy: Mail Today