Ashok Leyland, the second largest truck manufacturers in India is also into the manufacturing of industrial engines, generator sets, marine engines, buses and special vehicles such as defense vehicles and fire engines. The first Indian vehicle manufacturing company to claim the ISO 9001 certification has set an example of one of the most efficient operations management practices that brought the organization back on track after a brief slump. The following is the company overview of Ashok Leyland and its performance since inception.
In 2003, Ashok Leyland (AL) was India's second largest truck manufacturer after Tata Motors. AL also manufactured industrial engines, generator sets, marine engines, buses and special vehicles such as defence vehicles and fire engines. In 2003, the company's sales were Rs. 2,748 cr. AL has about 100 authorized service centers, 1,476 workshop bays that repair Leyland made vehicles, and 1,226 spare parts outlets. The company also has 17 warehouses supporting 141 dealer outlets for vehicles, 70 dealer outlets for industrial engines, and 23 dealer outlets for marine engines. But due to economic recession, the demand for commercial vehicles declined. As a result, from Profit-After-Tax (PAT) of Rs. 124.9 cr on sales of Rs. 2,482.5 cr in 1996-97, AL saw its PAT collapse to Rs.18.4 cr on sales of Rs. 2,014.3 cr in 1997-98. By its efficient operations management after two years, PAT bounced back to Rs. 78.5 cr in 1999-2000 and sales of Rs. 2,598.7 cr.
Although India had a well-developed rail network and a reasonably good water transport network, road transport accounted for a major share in the overall movement of goods and people. Road transport was preferred because of convenience and flexibility. Road transport improved its share in the total goods traffic from just 12% in the 1950s to 62.5% in 1998. In passenger traffic, its share improved from 26% in 1951 to 85% in 1998. By 2000, the share of road transport in goods traffic was increased to 65% and passenger traffic to 87%. The share of roads in total transport was around 65% in 2002-03 and is expected to be around 70% by 2007-08. The Commercial Vehicles (CVs) industry's growth mainly depends on industrial growth, road infrastructure development and the share of roads in total transport. Restrictions on overloading, legislation on old vehicles, emphasis on mass transportation, retail financing, environment and safety regulations among others also influence the demand for CVs.
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