CHAPTER III

3.1 INDUSTRY PROFILE

Automobile industry history

In the year 1769, a French engineer by the name of Nicolas J. Cugnot invented the
first automobile to run on roads. This automobile, in fact, was a self-powered, three wheeler,
military tractor that made use of steam engine. The range of the automobile, however, was
very brief and at the most, it could only run at a stretch for fifteen minutes. In addition, these
automobiles were not fit for the roads as the steam engines made them very heavy and large,
and required ample starting time. Oliver Evans was the first to design a steam engine driven
automobile in the U.S.

The automobile industry finally came of age with Henry Ford in 1914 for the bulk
production in cars. This lead to the development of the industry and it first begun in the
assembly lines of his car factory. The several methods adopted by Ford, made the new
invention i.e.) car, popular amongst the rich as well as masses.

According to the history of automobile industry U.S, dominated the automobile

markets around the globe with no notable competitors. However, after the end of Second
World War in 1945, the automobile industry of other technologically advanced nations such
as Japan and certain European nations gained momentum and within a very short period,
beginning in the early 1980s, the U.S automobile industry was flooded with foreign
automobile companies, especially those of Japan and Germany.

The current trends of the Global automobile industry reveal that in the developed
countries the automobile industry are stagnating as a result of the drooping car markets,
whereas the automobile industry in the developing nations, such as India and Brazil, have
been consistently registering higher growth rates every passing year for their flourishing
automobile markets.

Indian automobile industry

India is one of the fastest growing automobile industries in the world. After 1960, the
automobile industry saw rapid growth and many automotive manufacturers started
production. The automobile industry in India is the seventh largest in the world with
and annual production of over 2.6 million units in 2009. In 2009, India emerged as Asia’s
fourth largest exporter of automobiles, behind Japan, South Korea and Thailand. By 2050, the
country is expected to top the world in car volumes with approximately 611 million vehicles
on the nation’s roads.

A well developed transport network indicates a well developed economy. For rapid
development a well-developed and well-knit transportation system is essential. As India’s
transport network is developing at a fast pace, Indian automobile industry is growing too.
Also, the automobile industry has strong backward and forward linkages and hence provides
employment to a large section of the population. Thus the role of automobile industry cannot
be overlooked in the Indian economy. Indian automobile industry includes manufacture of
trucks, buses, passenger cars, defense vehicles, two wheelers etc.., The industry can be
broadly divided into the car manufacturing, two-wheeler manufacturing and heavy vehicle
manufacturing units.

The major car manufacturers are Hindustan Motors, Maruti Udyog, Fiat India Pvt.
Ltd, Ford India Ltd., General Motors Pvt. Ltd., Honda Siel Cars India Ltd., Hyundai Motors
India Ltd., Skoda India Pvt. Ltd., Toyota Kirloskar Motor Ltd., to name a few. The two
wheeler manufacturing is dominated by companies like TVS, Honda Motorcycle & Scooter
India Pvt. Ltd., Hero Honda, Yamaha, Bajaj etc..,

The heavy motors like buses, trucks, defense vehicles, auto rickshaws and other
multiutility vehicles are manufactured by Tata-Telco, Ashok Leyland, Eicher Motors, Bajaj,
Mahindra and Mahindra etc..,

Indian automobile market

Many foreign companies have been investing in the Indian automobile market in
various ways such as technology transfers, joint ventures, strategic alliances, exports and
financial collaborations. The auto market in India can boast of attractive finance schemes,
increasing purchase power and launch of latest products.

Some vital statistics regarding the automobile market in India has been mentioned below:

 India ranks 2nd in the global two-wheeler market

 India is the 4th biggest commercial vehicle market in the world

 India ranks 11th in the international passenger car market

 India ranks 5th pertaining to the number of bus and truck sold in the world.

Heavy vehicles market

Heavy vehicles market in India comprises of trucks, machines, ambulances and

school buses. The popular heavy vehicle brands in India are Volvo, Eicher, Tata, Telco,
Ashok Leyland and Swaraj Mazda.

Following are the major players in the Indian Heavy Vehicles Market:

 Tata Motors is the largest automobile manufacturing company in India that manufactures
a wide range of heavy vehicles adhering to world class standards. It is the market leader
in commercial vehicles in all the segments, be it heavy vehicles, medium size vehicles,
small vehicles, buses or defense vehicles. The heavy vehicles manufactured by Tata
Motors have highly developed braking structure, high ground authorization, better
direction competence and a muscular body. The advanced engine imparted to these
heavy vehicles makes them a class apart from the other heavy vehicles running on the
Indian roads and Highways. Tata Motors leads this segment with a market share of 61%.

 Ashok Leyland is an exclusively heavy vehicle manufacturing company situated in

Chennai and was initiated in the year 1948. It is one of India’s biggest producers of
heavy vehicles such as trucks, buses, military vehicles and also the second biggest
commercial vehicle firm in India heavy vehicle division with a market share of around
27%. Ashok Leyland is also renowned for producing auto spare parts and engines for
marine and industrial submission.

 Eicher Motors was initiated in 3rd September, 1960. The first firm to manufacture the
first tractor in India. The indigenously manufactured tractor was introduced in the Indian
market straight from Eicher’s Faridabad factory. The history of the firm can be traced
back to 1948, when Good earth Company was established for vending and repairs of
imported tractors in the nation.
  Swaraj Mazda, a tie up between Mazda and Swaraj Enterprise, Swaraj Mazda
represents advanced Indian expertise and manufacturing. The firm has Research
and Development improvement edge on international scale. The firm
manufactures various products such as Bus, Ambulance, Trucks etc.

The modern automobile market in India has been considering key issues in the
process of growth:

 Customer care, and not just service

 Domestic as well as multi-national investments

 Searing through cut-throat competition

 Road safety

 Anti-pollution norms

 Co-ordination with government to enable advancement

 Used vehicle trade

The future of Indian automobile market is bright as it looks forward to manufacturing

and implementing new innovations such as electric cars as provided by Reva, alternate fuels
like CNG and LPG and probably customized internet automobile orders.
 2.2 COMPANY PROFILE

Ashok Leyland has been a major presence in India’s commercial vehicle industry
since 1948, the year it was born. The origin of Ashok Leyland can be traced to the urge for
self-reliance, felt by independent India. Pandit Jawaharlal Nehru, India's first Prime Minister
persuaded Mr. Raghunandan Saran, an industrialist, to enter automotive manufacturing.

They are one of the India’s leading manufactures of commercial vehicles and special
vehicles, engines for industrial purpose, gen sets and marine requirement equipments. For
over five decades, Ashok Leyland has been the technology leader in India’s commercial
vehicle industry, molding the country’s commercial vehicle profile by introducing
technologies and product ideas that have gone on to become industry norms.

Ashok Leyland at the time of its inception was known as Ashok Motors. It was
assembling Austin cars at the first plant, at Ennore, near Chennai. In 1950, the company
started assembly of Leyland commercial vehicles and soon the local manufacturing under
license from British Leyland, participation in the equity capital, in 1954, the company was re
christened Ashok Leyland.

In 1987 the overseas holding by LRLIH (LAND ROVER LEYLAND

INTERNATIONAL HOLDINGS LIMITED) was taken over by a joint venture between the
Hinduja group, the Non Resident Indian Transnational group and IVECO Fiat SPA part of
the Fiat group and Europe’s leading truck manufacturing company. Ashok P Hinduja is the
chairman of the company. The Hinduja group also associated with Ennore Foundries Limited,
Automotive Coaches and Components Limited, and Gulf Ashley Motors Limited.

The subsidiary holdings are Ashley Holdings Ltd., Ashley Investment Ltd., and
Ashok Leyland Project Services. The chief competitors of the company are;

 Mahindra

 Volvo

 Tata Motors
 With a commanding strength of the about 12,000 employees the company is looking
forwards to enhance the scope of its action. It is aiming at expanding its production operation
overseas to make it a more globally accessible company. It is looking to acquire a small to
medium sized commercial vehicle manufacturers in China and other developing nations,
which have an established product line. An example would be the 2007 acquisition of the
Czech based Avia’s truck business rechristened Avia Ashok Leyland Motors.

Since its inception, Ashok Leyland has been a major presence and these years have
been punctuated by a number of technological innovations which went to become industry
standard. This tradition of technological innovations and leadership was achieved through
years of vigorous in-house research and development.

From 18 seater to 82 seater double-decker buses, from 7.5 tonne to 49 tonne in

haulage vehicles, from numerous special application vehicles to diesel engines for industrial,
marine and genset applications, Ashok Leyland offers a wide range of products.

Ashok Leyland has seven manufacturing plants -

 Ennore Plant, Chennai.

 Hosur Plants Unit I, Unit II and Unit II A.

 Alwar, Rajasthan.

 Bhandara, Maharashtra.

 Pantnagar, Uttarakhand

Early products of Ashok Leyland included the Leyland Comet bus chassis sold to
many operators including Hyderabad Road Transport, Ahmadabad Municipality, Travancore
State Transport, Bombay State Transport and Delhi Road Transport Authority.

In the popular metro cities, four out of five state transport undertaking buses come
from Ashok Leyland. Some of them like the Double Decker and Vestibule buses are unique
models from Ashok Leyland, tailor made high-density routes.

Statistics reveal that the company is India’s largest exporter of medium and heavy
duty trucks. It sells close to 83,000 medium and heavy vehicles each year. The company has
a near 98.5% market share in the Marine Diesel engine markets in India. At 60 million
passengers a day, Ashok Leyland buses carry more people than the entire Indian Railway
network.

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:

Is a leader in the business of commercial vehicles, excelling in technology, quality and

value to customer fully supported by customer service of the highest order and meeting
national and international environmental and safety standards.

The Five AL Values are:

1. International

2. Speedy

3. Value Creator

4. Innovative

5. Ethical

Growth milestones of Ashok Leyland

1966 – Full air brakes introduced

1967 – Double Decker buses introduced.

1968 – Power steering offered.

1979 – Multi-axle trucks introduced.

1980 – Integral bus with air suspension.

1992 – Self-certification status for defense supplies.

1994 – ISO 9001 Certification

1997 – India’s first CNG powered bus.

1998 – QS 9000 Certification

1999 – CNG (Compressed Natural Gas) introduced.

2000 – Euro-I, Engines/vehicles introduced.

2002 – ISO 14000 Environment Management System Certification.

2002 – Exclusive Machine line – 2 for Hino cylinder.

2003 – E-Comet launched.

2004 – 50,000 mark vehicle produced.

2006- ISO/TS 16949 Corporate Certification.

2010- India’s first Hybrid CNG plug-in Bus. Showcased at Auto Expo 2010

2011- A full range player with DOST. Entry into the LCV segment.

2012- Jan Bus. World’s first single step entry, front engine, fully flat floor bus.

Associate companies

 Automotive Coaches & Components Ltd (ACCL)

 Lanka Ashok Leyland

 Hinduja Foundries

 IRIZAR – TVS

 Ashok Leyland Project Services Ltd

 Gulf Ashley Motors Ltd

  Ennore Foundries Ltd

Facilities:

 The company has seven manufacturing locations in India

1) Ennore, Tamilnadu

2) Hosur: Unit 1, Tamilnadu

3) Hosur: Unit 2, Tamilnadu

4) Hosur: Unit 2A, Tamilnadu

5) Alwar, Rajasthan

6) Bhandara, Maharashtra

7) Pantnagar, Uttarakhand

 Ashok Leyland’s Technical Centre, at Vellivoyalchavadi in the outskirts of Chennai,

is a state-of-the-art product development facility, that apart from modern test tracks
and component test labs, also houses India’s one and only Six Poster testing
equipment.

 The company has an Engine Research and Development facility in Hosur.

 The new plant in the North Indian state of Uttarakhand at Patnanagar is set up at an
investment outlay of Rs.1200 crores. This plant is expected to go on stream in the
year 2010 to cater mainly to the North Indian market taking advantage of the excise
duty and other tax concessions. The facilities have been so designed as to
accommodate further expansion in terms of capacity and future models. At full
capacity utilization, 75000 vehicles will roll out of the Patnanagar plant.

 The company has signed an agreement with Ras Al Khaimah Investment Authority
(RAKIA) in UAE for setting up a bus body building unit in the Middle East.

Clients (not exhaustive):

 Indian Army.
  US Army.

 Honduras Armed Forces (HAF).

 Tamilnadu State Transport Corporation (TNSTC).

 Metropolitan Transport Corporation (MTC), Chennai.

 State Express Transport Corporation (SETC), Tamilnadu.

 Kerala State Road Transport Corporation.

 Maharashtra State Road Transport Corporation (MSRTC).

 Andhra Pradesh State Road Transport Corporation (APSRTC).

 Praveen Travels.

 Sharma Transport.

Quality policy:

Ashok Leyland is committed to achieve customer satisfaction by anticipating and

delivering superior value to the customer in relation to their own business, through the
products and services offered by the company and comply with statutory requirements.

Towards this, the quality policy of Ashok Leyland is to make continual improvements
in the processes that constitute the quality management system, to make them more robust
and to enhance their effectiveness and efficiency in achieving stated objectives leading to

1. Superior products manufactured as also services offered by the company.

2. Maximum use of employee’s potential to contribute to quality and environment by

progressive up gradation of their knowledge and skills as appropriate to their
functions.

3. Seamless involvement from suppliers and dealers in the mission of the company to
address customers changing needs and protection of the environment.