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Submitted to: Prof. A. K. Mitra
Submitted by: Abhishek Rawat 09BS0000080 Sec E
About Ashok Leyland is a commercial vehicle manufacturing company based in Chennai, India. Founded in 1948, the company is one of India's leading manufacturers of commercial vehicles, such as trucks and buses, as well as emergency and military vehicles. Operating six plants, Ashok Leyland also makes spare parts and engines for industrial and marine applications. It sells about 60,000 vehicles and about 7,000 engines annually. It 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 joint venture announced with Nissan Motors of Japan would improve its presence in the Light Commercial Vehicle (LCV) segment (<7.5 tons). Vision Be among the top Indian corporations acknowledged nationally and internationally for: • Excellence in quality of its products • Excellence in customer focus and service Mission Be a leader in the business of commercial vehicals, excelling in technology, quality and value to customer fully supported by customer service of the highest order and meeting national and international safety environments and safety standards.
Tamil Nadu. Ashok Leyland supplies chassis in both completely built-up and knocked down conditions to Lanka Ashok Leyland. OB vans. as the case may be. Since 1987. tankers. with its plant at Gummidipoondi. well engineered afterchassis solutions: bus bodies. Lanka Ashok Leyland has also established a fully owned subsidiary called Lanka Ashok Leyland Services. ACCL has built over 18. This company is fully managed by Sri Lankan professionals. about 40 Kms from Colombo.front-end structures(FES). this is a joint venture between Ashok Leyland and the Government of Sri Lanka. aluminum containers. Over the years. in the joint venture is 28%.000 tippers and 24. through timely technology induction. which takes care of marketing and after-sales service including sale of spares. apart from tippers.000 FES Lanka Ashok Leyland Established in 1982. ACCL has been offering its customer in India and abroad. energy vans and the like. Hinduja Foundaries . which in turn assembles the chassis and builds bodies.SCOPE AND BUSINESS Ashok Leyland has five associate companies that adds up to its business Automotive Coaches & components Limited (ACCL) ACCL is the largest Tipper Body manufacturer in the organised sector in India. and sells them in the local market. ACCL has perfected the art and science of high quality body building. The factory is situated at Panagoda. Equity holding of Ashok Leyland Ltd.
IRIZAR-TVS Started in 2001. 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. Apart from assisting the investment entities of the Group identify and implement successfully projects in India.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. IRIZAR-TVS is a joint venture between Ashok Leyland. Ashok Leyland Project Services Limited Ashok Leyland Project Services Limited (ALPS). uncompromising quality consciousness and dedicated team work have all contributed to create a sound and solid base for Ennore Foundries in the foundry industry. a strong metallurgy base. Certified to ISO . telecommunications and surface transport infrastructure). . This company provides specialised services for undertaking pre-investment. This joint venture addresses the growing demand for luxury coaches in the country.000 MT in Grey Iron and 3000 MT in aluminum gravity die castings per annum. tractors.5. ALPS adds the Indian element to the multinational company or consortium. the internationally reputed bus body builder from Spain. Ennore Foundries is India's largest automotive jobbing foundry with production capacity of 45. competent engineering skills and expertise.Established in 1959. ALPS also provides professional services to help international companies interested in projects in India. product ranging from 10 kg to 300 kg in Grey Iron casting and up to 16. spearheads the project development activities of the Hinduja Group in India. As a preferred supplier to Ashok Leyland. industrial engines and power generators. Through its pool of multi-sector professionals (in areas such as power. kg in Aluminum gravity die casting. Capability to adapt to emerging trends and absorb new technologies. TVS & Sons Ltd and IRIZAR.
project development which includes feasibility studies.12 crores during 2007-08 compared to Rs.17 Crore in 2006-07 showing an improvement of 7.07 crores in the 2008-09.8% • After a sluggish start in 2008. .441. company formation and other professional services that are designated to deliver project opportunities from concept to commissioning. 7168. appraisals.7729.71 crores in 2009-10 compared to Rs.469. • The net profit rose by 6.4% in 2007-08 to touch Rs.31 crores compared to Rs. development of joint ventures.7244.5981. the sales turnover improved by 21% touching Rs. TURNOVER AND PROFITABILITY OF THE COMPANY • Ashok Leyland registered a sales turnover of Rs.28 crore in 2006-07.
trade barriers. Tax changes. economical.67 crores in 2009-10 against Rs.• Similarly the net profit improved to 123% to touch 423.190 crores in 2008-09. are all examples of macroscopic changes. new laws. To help analyse these factors we categorize them using the PESTEL model. PESTEL ENVIRONMENT There are many factors that affect any organization. social. . This classification distinguishes between political. demographic changes government policy changes etc.
The economics factors related to automobile industry are: . economic growth. to what extent does it believe in subsidising firms. What goods and services does a government wants to provide. Political: These refer to government policy such as the degree of intervention in the economy. • Foreign equity investment up to 100% in the automotive sector and there is no minimum investment criteria. By PESTEL analysis we can know about extended environment and key drivers of change of an organization. ecological and legal factor. • Promoting multi-model transportation and the implementation of mass rapid transport system.technological. The political factors related to automobile industry are: • Indian government auto policy aimed at promoting an integrated. what are its priorities in terms of business support. phased and conductive growth of the Indian automobile industry. inflation and exchange rates. taxation changes. • Changes in taxation policy. Economical: These include interest rates. Economic change can have a major impact on a firm's behaviour.
such as reduced interest rates for export financing. The social factors related to automobile industry are • Indian customers are highly price sensitive and put a lot of emphasis on value for money. . • Increase in petrol price. poor buying capacity and comparatively cheaper import of second hand automobile from developed country reduces the export of automobile from India in recent days. has granted concessions.• Weighted tax deduction of up to 150% for in-house research and R&D activities. Hence there exists tremendous scope for exports. Social: Changes in social trends like population increase can impact on the demand for a firm's products and the industry as a whole. • Several Indian firms have partnered with global players. • Cost of automobile in India is the cheapest in world . • Deteriorating foreign exchange situation in western country.The cost of a finished vehicle here is as much as the cost of gear box in developed countries. • Rise in price of the raw materials. • Govt.
improve quality and lead to innovation. Sometimes the technology reduces the life cycle of products. So the company has a large customer base to serve. Environmental: The ecological factors related to automobile industry are • Physical infrastructure such as roads and bridges affect the use of automobiles. • Upward migration of household income levels. • Continuous technological innovation. The technological factors related to automobile industry are • Accelerated acquisition of technology capabilities to raises productivity in agriculture. These developments can benefit consumers as well as the organizations providing the products. . • Global warming. • Renewable energy development.• Changed lifestyle of people has lead to increased purchase of automobiles. coal gas renewable. • Preference for fuel efficient vehicles with lower running cost. Technology can reduce costs. Technical: New technologies create new products and new processes. • Growth in urbanization. Ex.
• Legal provision relating to environmental pollution by automobiles. The legal factors related to tractor industry are • Collaboration with government which shapes policy issues.Legal: These are related to the legal environment in which firms operate. This is independent of any manufacturer. In any P5F analysis. one must examine the following: . Legal changes can affect a firm's costs if new systems and procedures have to be developed and demand if the law affects the likelihood of customers buying the good or using the service. In this. PORTER’S FIVE FORCES (P5F) ANALYSIS A Porter's Five Forces Analysis explores five principal industry factors to determine the attractive of a given industry in a given market. • Legal provisions relating to safety measures. As such. we look at the automobile industry in India. In recent years the changes legal factors of developed countries affected firms' behaviour in other countries due to globalization. it applies to every Indian car manufacturer.
The threat of new entrants: In most markets. There are more than 20 foreign manufacturers selling in India (including ultra high-end such as Rolls-Royce and Lamborghini). we expect the threat of new entrants to be high. the capital and expertise needed to setup an auto or parts manufacturing facility would be a great enough barrier to entry to prevent many new entrants from setting up. The threat of new entrants.1. The threat of substitute products . like the famous Tata Nano. As such. 5. 2. 3. and ever-expanding financing options to rural residents. given India's incredible growth forecasts. The threat of substitute products. the market is attractive. The amount of bargaining power suppliers have. Of course there are also a plethora of incredibly cheap choices. The bargaining power of buyers/customers: Buyers in India have a wide variety of choice. The bargaining power of buyers/customers. The amount of rivalry among competitors. However. 4. infrastructure progress (especially new and better roads).
These are very real and obvious threats to auto manufacturers The amount of bargaining power suppliers have: It is likely that the suppliers to the manufacturers have considerable bargaining power. They are not held ransom by one single manufacturer as they can market their products to any of the others in India. . The industry is not yet in its shake-out phase and is still struggling to find the up-and-coming stars and possibly topple the leaders.India is famous for its two-wheelers (bikes and mopeds) and three-wheelers. The amount of rivalry among competitors: The amount of rivalry amongst competitors in India is high.
Eicher began its business operation in 1959 with Tactor. COMPETITION WITH MAHINDRA:Mahindra had also launched a truck in collaboration with Navistar Inc.COMPETITION OF ASHOK LEYLAND WITH OTHER AUTOMOBILE SECTOR COMPETITION WITH TATA MOTORS:Ashok Leyland Ltd. It is looking to acquire a small to medium sized commercial vehicle manufacturers in China and other developing nations. USA on Indian roads known as Mahindra Navistar. With a commanding strength of the about 12.Gear box. It is aiming at expanding its production operation overseas to make it a more globally accessible company. which have an established product line.which is going to give tuff competition to Ashok Leyland.Buses. COMPETITION WITH EICHER:Eicher is also one of competitor of Ashok Leyland. An example would be the 2007 acquisition of the Czech based Avia’s truck business rechristened Avia Ashok Leyland Motors. will introduce 15 new truck models as India's biggest truck makers by sales seek to beat growing competition from Tata motors. . To Compite with Ashok Leyland Tata motors will also introduce three new heavy trucks in India by March from its Prima range of so-called world trucks.but now Eicher had expanded it self with Truck’s.Eicher small trucks are making there good market in India.The trucks will be between 16 tonners and 49 tonners.etc.As. The new truck models under its new U-Truck platform by March 2011.we had seen that Ashok Leyland low floor buses giving tide competition to Tata motors low floor buses in Delhi.Eicher is giving competition to Ashok Leyland with Truck’s and Buses.000 employees the company is looking forwards to enhance the scope of its action.
and engines. To sell is to know your customers. Ashok Leyland has a large customer base for public transport buses. The information captures the business nuances of the customers and shows Ashok Leyland precisely where and how the customer would use trucks. offering a world class range of trucks. special application vehicles. commercial vehicles. Ashok Leyland has built-up a data base of 130. over five decades in the transport solution industry. government buyer and defence also.it caters to different class of society which includes individual buyer. buses. touching millions across 40 countries world wide. defence and special vehicles for special purpose. The company today knows much more about its customers today than earlier.CUSTOMER BASE AND SEGMENTATION Ashok Leyland. industrial buyer. Segmentation of Ashok Leyland can be done on the basis of it’s user:Segmentation Industrial user Defense user . Ashok Leyland has a good customer base most of the customer who comes to Ashok Leyland become a loyal customer. Ashok Leyland is Brand name with the flagship of Hinduja group.000 customers.
Ashok Leyland are conscious of the fact that vehicles are more than just a means of transporting people and goods. PUBLIC USER:-Public user includes individual or passenger transport .Industrial user includes transporter. CUSTOMER’S VALUE Ashok Leyland believe that our impressive strides in the marketplace stem in equal parts from our proactive approach and our customers' unstinting support. driver training and a responsive after-market network. today and tomorrow. Ashok Leyland have.Defense user include Indian army trucks. and by backing them up with consultancy. tanks and transport buses. GOVERNMENT USER:.Government user include state and central transport like DTC. Ashok Leyland firmly believe that this honest approach will make the Ashok Leyland marquee the symbol of the very best in transportation. finance. Ashok Leyland understand that they have a deep and far-reaching impact on society. therefore.Ashok Leyland care for there customer.Public user Government user INDUSTRIAL USER:. . DEFENSE USER:. always endeavoured to engineer products and systems that promote progress on all these fronts. coal and mining industry and other industries etc.they try to give best quality engineering as well as best quality service to there customer. logistics company.UPSRTC and other. the national economy and the environment. earned the only way Ashok Leyland know: by giving our customers the most appropriate transport solutions for each of their applications.
to make them more robust and to enhance their effectiveness and efficiency in achieving stated objectives leading to (1). through the products and services offered by the company and comply with statutory requirements.The major characteristic through which Ashok Leyland give the best quality to there customer are:* Reliability * Maintainability * Safety * Strength * Performance * Features * Conformance * Durability * Service * Response *Aesthetics * Reputation Ashok Leyland is committed to achieve customer satisfaction by anticipating and delivering superior value to the customer in relation to their own business. Maximum use of employees potential to contribute to quality and . Superior products manufactured as also services offered by the company. (2). The quality assurance of Ashok Leyland is to make continual improvements in the processes that constitute the quality management system.
For the Quality assurance Ashok Leyland completed journey towards global standards of quality.environment by progressive up gradation of their knowledge and skills as appropriate to their functions. The more comprehensive ISO 9001 certification came in 1994. QS 9000 in 1998 and ISO 14001. Good Organisational Climate. Good Training System. 2. (3). High Market Share . 3. SWOT ANALYSIS Strength of the company 1. history to win the ISO 9002 certification. Seamless involvement from suppliers and dealers in the mission of the company to address customers changing needs and protection of the environment.
4. STRATEGIC GAPS AND OPPORTUNITIES FOR THE COMPANY As we know through this assignment that Ashok Leyland is also one of the leading automobile manufacturer in the world and it also came to know that:- . demand for heavy vehicle have steeped up all over the globe. National market through good advertisement. Sales representatives are less 4. 3. Complicated national market 5. 2. Liberal credit policy of other brand 3.4. Company provides better credit facility to dealers. Promotional programmes of other brand 4. Company introduces promotional programmes Threats faced by the company 1. Low margin 2. Standard Quality Product Weakness of the company 1. Good replacement facility if other brands. High competition 2. High price 3. Skilled Employees 5. There is no proper mechanism to handle the grievance of the customers Opportunities for the company 1. Strong Functional Structure 6. Due to liberalization.
It helps to increase the brand awareness and image. Seshasayee. "The role of R&D is central in fulfilling the company-wide commitment to total customer satisfaction" states Mr. harness and adopt technologies that provide value to the customer in an atmosphere enabling creativity and innovation. Provide Value to the customer:The immediate R&D priorities are to pro-actively address safety and environmental issues. . Over the years. Keep innovating there product:Ashok Leyland product development successes have come from a keen sense of anticipation and attentiveness. The company should concentrate more on the luxury truck segments to keep a strong hold in the market The company should earmark more money for the advertisement and sales promotion of its products. Managing Director.Provide 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. R. The company initiated research into alternative fuels well before legislative debate had even begun in the country. this philosophy has been translated time and again into products that seamlessly integrate international technology with local needs. The result was the implementation of CNG technology ahead of the rest promising a breath of fresh air for polluted cities. and adds that the increased infrastructural and financial support expresses the company's determination to become self-reliant in R&D. The company should concentrate on markets in the international arena where its competitors are less powerful. Powering those who "engineer tomorrows" with an enabling infrastructure has been top priority for the company.
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