Ashok Leyland has announced the setting up of its assembly plant at Dhaka, Bangladesh. Built over a period of 15 months, the plant, spread over an area of 37 acres, is a strategic joint venture between Ashok Leyland and IFAD Autos Limited, Bangladesh. An important market according to Vinod K. Dasari, CEO and MD, Ashok Leyland Ltd., the new plant is expected to enable the Chennai-based company to carve a larger share of the CV market. A part of the company’s vision to strengthen its overseas presence, the Bangladesh facility will have a capacity to roll out 600-800 vehicles each month. Supporting the plant activities will be a bodybuilding and vehicle testing facility. The two are expected to be functional in the next two years. IFAD Autos has been selling Ashok Leyland vehicles in Bangladesh through 12 dealers.
Anuj Kathuria, President, Global Trucks, Ashok Leyland Ltd.
Interview by: Ashish Bhatia
Q. After acquiring the Nissan stake, what is the strategy going forward?
A. Information about Nissan and other joint ventures is out in the public domain. As far as our global business of trucks and buses is concerned, we have now started an international office at Dubai. It will be a hub for our international operations. We have identified our target markets internationally, and continue to work towards enhancing our offerings there. We would develop satellite manufacturing plants in some of these markets to establish a local presence. It will also help in the easing of tariffs and the duty structure. A decision will be taken on a case-to-case basis. We are in advanced stages of development in places like Bangladesh. Again it is not an investment Ashok Leyland is making solely on its own. We are open to investments from another dealer or through a joint venture.
Q. What about regulations? They are tightening up in India too?
A. As far as BSIV is concerned, we are ready. There is nothing that we need to be worried about. As far as the customer is concerned, we expect the volumes to go down. Today the environment is so volatile, that saying anything doesn’t mean much because we don’t know which way the market is going to swing. The general expectation is that there will be a pre-buying demand. It may get dampened by demonetisation. However, to what extent, remains to be seen. We hope that this is a temporary phase, and will get over soon.
Q. What role does a subsidiary like Albonair GmbH play in the wake of tightening emission regulations?
A. Albonair is a 100 per cent subsidiary, and we are working with it on both BSIV and BSVI emission regulations. They have the systems, and are supplying them to global Original Equipment Manufacturers (OEMs). It is a huge added benefit as we get to experience the systems before other Indian OEMs could. We had showcased a Euro6 product at Auto Expo 2016. The transition poses a huge challenge since no country globally has gone from BSIV to BSVI in a three year span. It takes 10 years generally. It’s not just about OEMs, but also about tier-1 suppliers getting ready; about the overall infrastructure. BSVI will completely change the vehicle and the way it looks. For BSVI, different countries have adopted different ways. In Europe and US, they had their own solutions. Here, it will most probably be a combination of EGR or SCR plus a DPF, Diesel Oxidation Catalyst (DOC) and Total Organic Carbon emission (TOC), etc. In western countries, the trend is to use technology that is both, sophisticated and expensive. A lot of precious and rare metals are used in catalysts. In India, we will have to figure out a better way. We have been doing that in the past. We have started work on BSVI and we are working on a solution that meets the Indian requirements in terms of both performance and cost. The major challenge will be the development of network to support the vehicle in the aftermarket. I see it both as a challenge, and an opportunity. We would need to educate the entire chain, and right down to the customer and the driver. Much would depend on external factors like availability of upgraded fuel.
Q. Given the EBITDA margins of second quarter FY2016-17 (Q2), how do you look at your product portfolio?
A. Last quarter was good. We have been having a good run over the last seven to eight quarters where we have reported double digit EBITDA margins. It is supported by a right product mix. We are not just going after the market share. We are offering the best product to the customer and ensuring that he also gets what he wants. For us its a delicate balance between how much market share we go after and what margins we must maintain. Also, the working capital needs to be maintained. Otherwise the interest cost and other costs would go beyond control. It is a cautious approach towards attaining growth that is both profitable and sustainable.
Q. How do you see the third quarter (Q3)?
A. Very difficult to say. We are getting a mixed response so far. Where the transactions have been more or less cashless, customers are not affected. Where transactions have a substantial cash component, customers have been affected. So, its a mix bag. By the end of the month we will get to know whether the impact lasts for the short term or prolongs further. Definitely the next two months (November and December 2016) will show the impact. Everybody has become cautious. If one person is deferring his decision, others may follow. Dealers are not comfortable with adding stocks. We will have to wait for further clarity to emerge. Withdrawal from the current account has been hiked to Rs. 50,000. Banks are however not able to service that limit due to cash crunch. Diesel purchase with old notes, and toll exemption adds to the convenience. It however doesn’t cover the operator requirements, which are 10 times the limit prescribed.
Q. Globally, which are the key market segments Ashok Leyland is targetting?
A. Globally we are number four in buses. In trucks we are number 14. Our vision is to be in the top 10 in trucks, and top five in buses. In buses, we are already there. In the case of trucks, we need to focus on volumes. We should be able to get there over the next four to five years. Again it has to be both, sustainable and profitable. Since the domestic market is cyclical, we need to ensure that we have a good presence in the export markets. We have therefore identified clusters. One is the SAARC countries where we enjoy a major presence. The other is GCC, West-Africa and East-Africa. In ASEAN countries we see a lot of potential for LCVs too. Globally, there is an emerging trend in the tipper and tractor segment for higher horsepower engines. The new engines we are working on will be closer to 300 hp rather than the prevailing 230 hp mark. We are anticipating a requirement for 400 hp and higher power engines, especially for applications like deep mining and 49-tonne tractors. It is a segment that will emerge over the next couple of years, and is in line with what is happening in the international markets. Power-to-weight ratio is bound to move closer to international levels in India.
Q. What are the truck and bus models you are banking upon for domestic and international thrust?
A. In international markets we have a good presence in buses. For buses in the Middle East we have a plant in Ras al-Khaimah (RAK). We have almost the entire market to ourselves there. We have another bus which is designed, manufactured and developed for that market called the ‘Oyster’. In India, we have launched the ‘Sunshine’ school bus. In trucks, we have the ‘Captain’ platform. Prior to it we launched the ‘Boss’ platform. These two are contemporary platforms, which are meeting international performance standards. The results are evident in the market share gained over the last couple of years. We showcased ‘Guru’ at the Auto Expo. It will enter the market soon. These are ways and means of giving products to the customers to ensure profitability, a fact that the customer acknowledges.
Q. Tell us about the set-up in the international markets?
A. Plans to set up some satellite plants are in advanced stages of discussion. Bangladesh would be getting ready by early next year. Kenya would follow next. With the success of RAK behind us, this is a very good business model to follow. We will deploy it in other markets too. However the specifics remain to be aligned with the local demand.
Q. How much growth revenue are you targeting from global operations?
A. The emphasis is on growing the international business from its current level (10 to 12 per cent) of the overall volumes to atleast one third of our overall business.
Q. Which are the key commercial vehicle segments where you see growth coming?
A. The tractor-trailer segment is primarily driven by cement movement. October was very good; it was one of the better months for us in the segment. Cement movement is however driven by infrastructural development and will continue to do well. Another potential segment is the container movement; to and from the port. Despite its slow run in the first half of the year it is showing good potential. Tippers have shown immense growth potential too. The Total Industry Volume (TIV) growth in tippers has been 60 per cent, and we have gained market share. The challenge is on the multi-axle vehicles where it has fallen. TIV is down 22 per cent. It has neutralised growth in tipper and Intermediate Commercial Vehicle (ICV) segments. The overall growth in TIV was flat in first seven months of this fiscal. We grew by three per cent. We have gained one per cent market share over last year.
Q. How are you gearing up for growth in FY2018-19?
A. BSIV and GST are expected to come into effect in FY2017-18. The need will be to first familiarise with these new developments. The first six to nine months will be challenging for the industry. We don’t even know when GST will roll out as of now. Only after it is implemented will things start settling down. As far as commercial vehicles are concerned, with certain other policies on scrappage of old vehicles, and continued focus on infrastructure apart from building 100 smart cities, the market I feel, will come back to good levels. Today, a large part of the fleet on road is more than 15 years old. There are people with 1000 vehicles in their fleet and these have been retained since the initial purchase. In such operators, we see a huge opportunity. It again depends on the timing.
How do you anticipate price impact across the domestic and export product segments because of GST?
The (GST) rates announced do not make for cheaper vehicles. In some cases prices may increase. There is no benefit that will come to us. If the rates are going to be capped at 28 per cent, rates are 27 per cent currently. Commercial viability is unchanged. Operating costs would come down as a result of better turnaround times and higher efficiency. One perspective is that the requirement of vehicles will come down. The other perspective is that because efficiency will go up, more freight will move by road and over longer distances. Today you don’t move your goods to the best market because of unforseen delays. Perishable goods simply don’t move to the best market. If that happens, the distances of commute may increase. Another area of growth could be inter-city transportation.
Q. How do you differentiate from competition with market share down to 32 per cent from 39 per cent?
A. Differentiation cannot only be done on the basis of the product. Product is a differentiator, but it is the relationship and connect with the customer that matters. When we meet customers, we look at how we can increase their profitability. How can we free up their time so that they can focus on their customers. We are working closely with our customers to give them the product that they want and not the product that we have. We are working on improving the reliability of our vehicles. So, we are offering a complete package and not just the product. We were the first ones to start a containerised workshop. If 50 to 60 tippers are operational on-site, we are deploying our own container workshop there. It stays on-site till the operations continue. We have also come out with novel concepts like workshop on wheels.
Q. How do you look at Light Commercial Vehicles (LCVs) growth?
A. The demand will come back. It always lags Medium and Heavy Commercial Vehicles (M&HCVs). I feel the headroom over there is huge. The last couple of years of downtrend did not help. It will surely pickup going forward.
Q. Do you see your growth projections being impacted with dedicated freight corridors likely to come up by FY2020-21?
A. There are talks about waterways and other rail corridors coming up. In roadway transportation, the biggest advantage is point to point transport which other modes of transport won’t be able to replicate. With cargo specifically suited to a particular mode of transport, it is not that 100 per cent of cargo has to be moved by road. The quantum of cargo to be moved is huge, and I feel, India has a long way to go. With the population we have, the volumes will only increase.
Q. What synergies are you looking at between your defence products and commercial vehicle products?
A. Defence is a very specialised field. Being an organisation we will look at synergies. There will be modules that would be available on the truck platform that will be used there as well. Customisation is however done by the defence team in close co-ordination with the defence heads. We have 6×6 and 8×8 platforms. If a rear axle on a tipper suits a defence vehicle, we will use it. It however has to be developed keeping the specific requirements in mind.
Q. You won the Deming prize at Pantnagar. What next?
A. The (Pantnagar) plant touched its maximum operations capacity only last year. We attained the milestone of 50,000 vehicles for the year in March 2016. The plant is going to be the mainstay. The Deming prize adds to the conviction of doing well. All our new products, the Captain, Boss, and Guru are being manufactured there. We will cotinue to invest in the plant depending on the requirement. As of now we are finding ways to maximise utilisation at other plants. The Pantnagar plant caters to the domestic market, mainly the northern and the eastern zones. The growth in these regions is a testimony of the respective plant’s contribution. Growth in East has gone up to 25 per cent over single digit figures attained previously.
Q. There is a buzz around Liquified Natural Gas (LNG) CVs. What is your take on it?
A. LNG as a technology in the Indian context is in its early stages. We were the first to get CNG so we have never really been averse to getting new technology into the market. But it has to be a viable business case. As of now the clarity of it being a prospect alternative fuel is yet to emerge. Earlier CNG was being pushed for by the government and the industry but all of a sudden it is losing popularity as a fuel. In the case of LNG trucks, unless it is a pan India preposition, it wouldn’t make for commericial viability. It also depends on how the crude prices, the dollar-rupee conversion rate, etc., define the acceptability of diesel as a fuel. If that happens people will stop looking at alternative fuels. As the next best alternative to diesel, LNG certainly has the potential. It has worked in smaller countries, and on smaller routes.
Ashok Leyland Ltd. has announced the completion of acquisition formalities of Nissan Motor Co. Ltd.’s stake in each of the three joint ventures (JVs) formed between the two companies, namely Ashok Leyland Nissan-Vehicles Limited, Nissan-Ashok Leyland Powertrain Limited and Nissan-Ashok Leyland Technologies Limited. In September 2016, Ashok Leyland and Nissan reached an arrangement under which Nissan would transfer its ownership in the three JVs to Ashok Leyland subject to statutory approvals. With all necessary statutory approvals in place the acquisition was completed for a consolidated consideration of Rupees-three paid by Ashok Leyland for all the shares of the three JVs. As part of the arrangement, Ashok Leyland will continue to build, under a licensing agreement, the Dost, Mitr, and Partner light commercial vehicles based on Nissan’s design, engineering and technology.
Ashok Leyland has introduced an electric bus, developed indigneously for the Indian mass market.
In a country where mass transit is by means of 1,50,000 diesel-run buses, often accused of attributing carbon dioxide and smog, Ashok Leyland has unveiled a new electric bus called the Circuit. Adding to the efforts of reducing global warming, the Circuit points at a rising transition towards alternate mediums of propulsion in India. Especially electric medias, and in particular buses, which form the backbone of India’s public transport despite the arrival of newer mediums like metro and monorail. Expected to contribute to the paradigm shift in public transportation in India, Ashok Leyland has indigneously developed the Circuit, a full electric bus, ahead of schedule. Unveiled at an event in Chennai, the Circuit bus series is a zero emission vehicle that was completely engineered in India. It was designed keeping in mind the Indian road conditions, and the prevailing load conditions. Varied topography along with usage was also considered. The Circuit thus has been built on a simple, mass-market platform, which aims to reduce operational and maintenance costs.
At the Circuit’s unveiling ceremony, Ambuj Sharma, Additional Chief Secretary, Industries and Commerce, Government of Tamil Nadu, expressed that the government aim is to ensure 20 per cent of the vehicles sold by 2020 should be electric or hybrid in nature. “Where the former will be pure electric, the latter can be mild or strong hybrid. Considering the upfront acquisition cost and running cost, there is a lot that matters. However, moving away from fossil fuels is the need of the hour,” he mentioned. The Circuit, according to
T Venkatraman, Sr. Vice President – Global Bus, Ashok Leyland, is part of the plan to invest Rs. 500 crore towards expanding the bus portfolio. The investment will be phased, and close to Rs. 22 crore have been pumped into the development of the Circuit, he added. Venkatraman revealed that all transport corporations are talking about procurement, and for each of them acquisition cost is important. “We already have three or four STUs which are actively under tendering. Once people see our ability to participate, they will come to us.”
Parts that make the Circuit
If the name ‘Circuit’ sounds unusual for an electric bus, it is also reflective of the change that it taking place in the Indian auto industry. Up to 40 per cent of the parts that make the Circuit are sourced locally. This excludes the Lithium-ion batteries. Their management is a proprietory tech however, and the IPR lies with Ashok Leyland aver sources. Equipped with an alert system that can signal if the bus is low on power, the Circuit has a 120 km travel range on a single charge under standard test conditions. While sources claim that the batteries are sourced from Ashok Leyland partners in the United States, they can be fully recharged in three hours according to Venkatraman. Averred Venkatraman that it is not about usage but about battery management that is important. This, he added, will need to be monitored for charging and discharging of the batteries as part of the vehicle’s usage cycle. “The material can come from anywhere, the whole intelligence of managing the battery is an electronic control knowledge,” opined Venkatraman. The batteries of Circuit, claim sources, are capable of lasting up to seven years depending upon their usage.
The Circuit bus is part of a platform strategy that will spring new variants and more buses claim industry sources. It would all depend on the requirement, they add. According to Venkatraman, it is possible to make an electric bus with 65-70 seats. However the amount of batteries it will require will simply make it prohibitive, he added. The dimensions, body specifications, and grade-ability of Circuit comply with Urban Bus Specifications II set by the Ministry of Urban Development, Government of India. Developed with technological inputs from Ashok Leyland’s UK subsidiary Optare, which is looked upon as a pioneer of electric buses, the Circuit can seat 31 people excluding the driver. The seating layout is a classic 2×2. Attention has been given to ergonomics. The driver cockpit has been designed to ensure a comfortable drive. From the passenger point of view, a big change is going to be the near noiseless travel. The Circuit emits 78dBA of noise, which is considerably less than the 85dBA noise a conventional diesel bus in the same class emits. The Circuit features on-board wi-fi and USB mobile charger for the convenience of the passengers.
At the heart of the Circuit is a motor. It is coupled to a propeller shaft and the differential. Capable of attaining a top speed of 75 kmph, the Circuit is currently available without air-conditioning. Designed and engineered with a payback period of up to five years, an air-conditioned version will be offered upon demand. Built at Ashok Leyland’s plant at Alwar, Rajasthan, and at Viralimalai, Tamil Nadu, the Circuit, according to Venkatraman, can be rolled out in three weeks from either facility. With focus on cost competitiveness, the Circuit, according to Venkatraman, will be made specific to order. It will, he added, make a good medium for transport at heritage locations and in hilly areas. Sale of 50 units in the current fiscal has been envisaged. The plan is to take this number to 200 units next year. With government offering the subsidy under the Faster Adoption and Manufacturing of (Hybrid) and Electric vehicles (FAME) scheme on a first-come-first serve basis, the onus will be on the STU to engineer a proposal, and seek the subsidy to procure an electric bus. Industry sources claim that the Circuit will be priced in the region of Rs. 1.5 crore.
Slow, but picking up
The FAME scheme to promote electric and hybrid vehicles received much applause. Its allocation has been subject to scrutiny and criticism. The allocation is said to be not enough. If the FAME has been encouraging for manufacturers to jump on the electric (and hybrid) bandwagon, the need to develop technologies indigenously is calling for more support. For every diesel bus replaced by an electrically propelled one, a whopping 25-tonnes of CO2 emissions can be reduced every year. As per the study by Indian Institute of Science (IISC) that undertook the evaluation of electric vehicles for urban transport, electric buses generate 82 per cent more profit over diesel buses. Revenues too can see a 27 per cent hike. The Circuit electric bus provides Ashok Leyland an opportunity to tap into the FAME scheme, which was launched in April 2014 by the central government, and is part of the ambitious National Electric Mobility Mission Plan (NEMMP). Under NEMMP, the government aspires to put seven million electric and hybrid vehicles on the roads of the country by 2020. Claim industry sources, that in the case of buses, it is the length of the bus and its charging speed that is among the prime factors that decide the level of subsidy. Mentioned Venkatraman, “We need to work with our partners, and engage with battery manufacturers to figure out what more we can do to make the electric bus more efficient.”
T. Venkatraman, Senior Vice President – Buses, Ashok Leyland Ltd.
Q. How do you look at the FAME scheme?
A. Since pollution is surging in cities, the government is compelled to offer an option, and say that they will increase the subsidy. If it will be sensibly priced, more and more people will respond to it. More subsidy will translate into easier availability of battery technology, which would make electric vehicles a more engaging option. Himachal Pradesh and Chandigarh are offering a VAT subsidy. It is about making it happen. It is about work in progress. We need to see what can be done to make this happen. I can explain FAME to them, but the STU has to put together a proposal and seek the subsidy from the government. This is about first-come-first-serve subsidy.
Q. How do you see the ecosystem developing for electric vehicles in India?
A. We need to work with our partners to make it sensible. We have to engage more with the battery manufacturers and figure out what else can be done to make it more efficient. We have the ability and the know how to put it together. This vehicle is a 30-seater vehicle, which we can take up to 65-70 seats. But the amount of batteries it will call for will make it prohibitive. Our team is already working on that, and commercialisation is the key.
Q. How much time will it take to roll out one bus?
A. The bus can be rolled out in three weeks. It does not have too many aggregates put together, and it is more about assembly kind of situation. It is all about balancing the technology right. The bus can be rolled out in three weeks, provided the aggregates have been agreed upon, and the prototype is approved. If it is a brand new product to be built ground up, then it would take three months. There are many players who are importing this vehicle (an electric bus) from various parts of the world. There is a Chinese company that announced that it is setting up a plant in India. To us, the USP will be a mid-size vehicle, which has been completely developed in India. This would not be made to stock but made to order. We will serve what the customer wants. It would depend upon the application and the required battery.
Q. What about battery life in such applications?
A. Battery life, depending upon usage, is seven years.
Q. Which facility will the Circuit be made at?
A. The bus can be rolled out from either of our seven plants. For us, it is logistics that will play an important role. It will influence vehicle cost. Depending upon the demand, we would like to build this bus at a location that is closer to the customer. This would help to keep the vehicle’s logistics costs low. Our plants are fully equipped to facilitate technology transfer from one location to the other. The bus, we are aiming at city application, feeder routes offering last mile connectivity, and at tarmac. Tourist will be targetted as we move forward.
Q. Where are you sourcing the batteries from?
A. A battery is very important for an electric vehicle like the Circuit. It is therefore not about usage, but about how the battery is managed. The (battery) material can come from anywhere, the intelligence of managing the battery is about electronic control knowledge. For now, a Lithium-ion battery technology is good enough. A breakthrough in battery technology is expected as efforts to reduce the battery weight are on. Efforts are on to make it safer, smaller and more powerful. The battery is currently being sourced from the USA. We are working with three to four companies simultaneously. These include Malcom and Valence. It (battery) is something that we need to be very careful about. Many have tried and failed. Excessive heat is often the reason. We would like to minimise the risk first. We would like to work with the company which validates it under expert supervision.
Q. What is the effect of AC in terms of performance?
A. The AC will roughly take about 35-40 per cent off the distance travelled. This will necessitate an increase in battery power. The battery will need to be managed in a modular way as the arrays are increased. This can be managed. A power bank is a decent business model, but calls for a need to balance the batteries. When you have multiple batteries you can’t have different charging in different batteries. The mismatch of charge will create a surge.
Q. What investment would such activities attract in the future?
A. For the expansion of our bus plant, we have put in more than Rs. 500 crore, which stands relevant for multi-application and not just this product. Out of this, roughly 10 per cent of the investment will be routed to such an application. Some transport corporations are talking about procurement of an electric bus. For each of them it is the acquisition cost that matters. We have already got three or four STUs which are actively under tendering. Once our ability to participate is evident, they (STUs) will come to us. We are trying to ensure that the subsidy is sensible.
Q. What are the critical issues when it comes to electric vehicles?
A. Monitoring and discipline are essential when it comes to the operation of electric vehicles; their charging cycle and their usage. This includes carrying out of the necessary checks. An interesting part is, an electric bus will not throw the kind of surprises a diesel bus could. Considering the fact that alternate fuel is the cause of concern as well as the most relevant topic the world over, each programme calls for a robust structure. There is a need for infrastructure to be in place before an experiement with technology is carried out. An example is the need of CNG pumps to ensure a constant and consistent supply of gas before the technology is made commercially available. We believe that an experiment is easy since one can work with the currently available power options and then build the infrastructure. Factors like how the cost of battery can be brought down matter. Reduction in cost has an effect on the payback period, and is thus important. If payback period goes down, a lot of electric vehicles will hit the road.
Ashok Leyland has always been looked upon as a manufacturer of heavy duty trucks and buses. This is set to change as the Hinduja Group flagship has started drawing plans to increase thrust in the LCV space post the end of Nissan association. The company, claim sources, is looking at introducing eight-to 10 products over the next two to three years in the light-duty space. For this the company is said to be investing to the tune of Rs. 400 crore. The new products are expected to be a mix of both, updated versions of existing products and new ground up vehicles. The first vehicle from the company is expected to reach the market in the next six months. While new vehicles will be developed in-house, as per the pact, the Dost and Partner will be built by Ashok Leyland under a licensing agreement with Nissan.
Ashok Leyland won the 2016 Deming Prize for its Pantnagar manufacturing facility. The Deming Prize is a global quality award awarded to companies that have established Total Quality Management (TQM) in their business operations. Ashok Leyland Pantnagar has become the first truck and bus plant in the world and also the only commercial vehicle manufacturer of non-Japanese origin to win the Deming Prize. Speaking of the win, Vinod K. Dasari, Managing Director of Ashok Leyland mentioned that the Pantnagar plant, a fully-integrated plant, is capable of manufacturing all future-ready products across trucks and buses. “Consistent quality, technology, innovation and robust processes are the pillars which have helped us garner international recognition and customer satisfaction,” he added. R. Sivanesan, Senior Vice President – Quality, Sourcing and Supply Chain of Ashok Leyland drew attention to plant being the youngest for the Original Equipment Manufacturer (OEM) and that the recognition was only befitting. The Deming Prize was established in 1951 by Japanese Union of Scientists and Engineers (JUSE) to honor W. Edwards Deming, who contributed greatly to Japan’s proliferation of statistical quality control after World War II. The selection procedure of the winner involves a tedious process. It is known to be very intense and time consuming effort both for the company and the examination body. The applicants are not provided with any criteria or issues to be addressed. They are expected to identify and address important issues based on the business objectives which in turn allows quality methodologies to be further developed. Every factor such as the applicants’ attitude toward executing Total Quality Management (TQM), their implementation status and the resulting effects are taken into overall consideration before deciding upon the final winner.
After severing ties by exiting the joint ventures established few years ago, Ashok Leyland and Nissan are said to be renewing ties. They are claimed to be in the process of signing a new restructuring agreement, which will enable both companies to enter into a new phase of business interaction. As per the new agreement, Nissan would agree to sell to Ashok Leyland all of Nissan’s shares in three joint venture companies formed in 2008. The joint ventures focus on technology development, and manufacturing of powertrains and vehicles, and will henceforth be wholly-owned Ashok Leyland subsidiaries subject to necessary approvals from the regulatory authorities in India. As part of the new arrangement, Ashok Leyland will continue to build, under a licensing agreement, the Dost and Partner in Light Commercial vehicles based on Nissan’s design, engineering and technology. Servicing and parts availability, claim industry sources, will be via a technical support arrangement. The restructuring agreement is also said to touch upon procurement of parts.