Ashok Leyland to create three divisions in operations rejig

13 May 2013


Commercial vehicle maker Ashok Leyland is going for a reorganisation of its operations with the creation of three divisions - one each for trucks, buses and power solutions.

The corporate structure at the company had traditionally been organised functionally, in terms of human resources, marketing, finance and sales.

The restructuring would help migrate the company to a matrix organisation (pooling people for projects based on similar skills), according to Vinod K Dasari, managing director, who was speaking at the company's annual results conference recently. Each division would have an independent global head, while the revamp would help the company be customer-centric and enhance shareholder value, he added.

It would also help the company align towards its mission to emerge among the world's top 10 truck-makers and top five bus-makers.

The move comes at a time when the commercial vehicle industry was going through a major slump, with Ashok Leyland reporting a 23 per cent drop in net profit for the financial year at Rs433 crore. Total income was down 3.3 per cent to Rs12,481 crore. While sales of medium and heavy commercial vehicles, especially, had dropped, light commercial vehicle Dost had bucked the trend with steady sales.

''Each division will have an independent head. It will not be a separate strategic business unit,'' Dasari, said.

The revamp is aimed at enhancing shareholder value and customer experience, he added.

Responding to a query about the time line for the company to become one of the top 10 truck and top five bus-makers in the world, Dasari said, the company had a five-year time-frame, but the markets had changed. He added, for the company it was more of a goal.

The commercial vehicle major had also lined up four launches during the current fiscal, including two cargo carriers - A truck (named as Boss eight-15 tonnes category) and Partner (five-six tonnes).

Dasari said the company would later also launch N Truck, a 16-49 tonne category.

The A Truck is expected to be launched in July while N Truck would be launched in October. He said the products would be manufactured at the company's Pantnagar facility and would have the company's Czech Republic subsidiary, Avia's, cabin, according to Dasari.

The A Truck would help the company to cater to the infantry combat vehicle (ICV) category, in which it did not have a strong presence at present.

''In the space where we are strong, including multi-axle, tipper and tractor, the drop was stronger. However, the drop in the ICV segment was lesser,'' said Dasari.

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