[Transsenger]

Being a CV enthusiast, I would like to start a new topic for discussion….the future of Indian CV companies and I hope we all can make it interesting with your views & points...

“Media reports suggest that nearly 10 Luxura has been inducted by APSRTC and private operator M/s Kesineni Travels recently received their first one from Ashok Leyland. Is would be nice if anyone get some pics of these.
Its really sad to find that being a market leader in bus segment, AL could not make it up in the high end bus segment. During the early 90’s, when the market & economic conditions were not mature enough, they introduced “Cruiser” (B7R of that times). But today when the market demands such buses, unfortunately they do not have one. Again today Volvo has set another trend thru B9R.

And I think both Ashok Leyland & Tata can think of bringing in multi-axle bus chassis, may be with front engine, air suspension, retarder etc. initially; which would be well received by the private operators as an alternative to premium expensive brands like Volvo. (As was the case with AL 12M and Tata 1616). Also our they have to work out some strategy to build a new premium brand for their InterCentury Luxura & Globus repectively.

Similar to the new strategies adopted by Tata Motors, I think its time AL does some rework on its bus range especially Cheetah & Viking, which has been in the market for more than 3 decades (except for modifications in engine). It would be better if they bring radial tyres as OE fitment; more advanced instrument cluster with RPM meter as standard fitment (like the one now used in truck models), digital speedometer, trip meter; an aesthetic front cowl, bonnet mounted gear lever like in new trucks and finally a range of branded quality fully built buses.(like Starbus range).

Even though AL has many credits like first to introduce CNG, Lowfloor, Vestibule buses etc., today we find more number of Tata CNG & Lowfloor buses on road. Similarly AL could not gain much in LCV bus segment with its Stag & Lynx models against Tata 709 / 909 / 1109 and Eicher. Having witnessed the aggressive emergence of Tata Motors in the bus segment with wide range of new products, who until recently had only a very few base models(1210, 1510, 1512) and largely leveraged on the low cost advantage; its time AL starts acting. As the competition strengthens and new player like Mahindra, Hino coming, they should rework their strategy rather than trying to yield on the brand image.

So too is the case with trucks. AL launched the first multi-axle truck way back in 1980’s. But today Tata 2515 is the largest selling truck model in India. Tractor trailer segment which was the strong hold of AL has witnessed erosion of market share when Tata launched 3515, 3015 & 4018 in the recent years. With Man, Mahindra, Hino its sure AL will have a tough time ahead. Similarly AL did not have any products in the lower end of LCV segment, where again Tata ruled with its 207, 407 etc. With the Nissan-AL project being delayed, there again competitors have an advantage.
As far as its engines, genset industry is flooded with players like Kirlosker, Volvo, Greves, Eicher, Mahindra etc. Similar is the case with marine engines where AL had almost 90% market share until recently, today Volvo, Cummins poss. strong threat.

Considering that all other players has strong technological tie-up with leading international player ;
Tata – Cummins, Hispano, Tata Daewoo, Marcopolo etc
Eicher – Volvo
Mahindra – Navistar
Force - Man
Daimler Benz
Volvo
Swaraj Mazda – Isuzu
Hino Motors japan
AMW – China

Unless AL does something different, the name “Ashok Leyland” would be wiped out from the Indian market a decade from now …(may be a merger or acquisition by some leading international player).”

What do you think?

[Mpower]

I think the problem is that AL neither has a strong R&D like Tata nor do they have a strong collaborator for a complete product.

They have several loose JV and collaborations with IVECO, Hino, ZF etc etc but are unable to compete in the premuim segments which are multiaxle trucks and luxury buses, but then this is still a niche segment.

Since the mass market is still big, I dont think there is any doubt of their survival.

[hvkumar]

Originally Posted by Mpower

I think the problem is that AL neither has a strong R&D like Tata nor do they have a strong collaborator for a complete product.

They have several loose JV and collaborations with IVECO, Hino, ZF etc etc but are unable to compete in the premuim segments which are multiaxle trucks and luxury buses, but then this is still a niche segment.

Since the mass market is still big, I dont think there is any doubt of their survival.

Iveco is over - I think Tata now has a collaboration with them!
Hino - is over, Toyota/Hino is coming in directly into India
NewGen - where is it
NextGen - really?
Luxura - yapping away for last 3 years
BEST - lost a market where they had 4-5,000 buses
DTC - lost another large city market
Luxury bus segment - completely decimated from a segment they had total domination, Volvo rules
LCVs - Cargo series a flop, Lynx, Stag no competition for the Tataa and Eichers

....Eicher is slowly eating up market share, and looks like AL is going to be a loser there again.

Someone told me that AL has huge unsold inventories (18000 vehicles +) and is close to bankruptcy - any substance to that?

[Mpower]

Originally Posted by hvkumar

Iveco is over - I think Tata now has a collaboration with them!
Hino - is over, Toyota/Hino is coming in directly into India

Someone told me that AL has huge unsold inventories (18000 vehicles +) and is close to bankruptcy - any substance to that?

Sure, but they are still using Hino and IVECO stuff and upgrading them.
After the recession hit last year even TATA had lots of unsold trucks.
AL has traditionally been weak in the LCV segment. Not surprising that Eicher is kicking their butt there.
Historically AL has been stronger in the South and TATA in the north.

[BaCkSeAtDrIVeR]

Yup. Ashok Leyland does seem to be on their way out.

I was looking at their site few weeks back, and was surprised to find ALM 370 engines still listed (in the marine engines section). They may be "tried and tested", simple and rugged, but they simply are no match for the modern turbo engines.

We had a fleet of heavy vehicles, mostly AL, and I was the "unofficial" liquidator for the family business. (being AL was NOT the reason for the losses).

Typically, in those days, AL heavy vehicles returned a FE of 4.5 - 5 KMPL, while Tatas had a FE of maximum 3.5 KMPL, on Kerala highways. In city driving (2 decades back), the figures were 2 0 2.5 for AL and 2.75 to 3 for Tatas - IIRC, 1210 chassis). Obviously, AL was the vehicle of choice for long distance operators and tatas were the chosen vehicles for short haul and city driving. Even now, you can see that most long distance vehicles in Kerala are from AL.

AL was very innovative, almost ahead of times. They had brought in the Hino engines, full syncromesh gear boxes, overdrive was available as an option, and had even launched rear engined buses (those still run in Chennai city service).

Tatas started their fightback with the Cummins engine. Stage 2 in the fight back was pricing the cummins engined and Tata's own engines on par. ;-)

I had successfully finished my job by stage 3, so not sure of what happened afterwards!!!

There was another reason for AL being the vehicle of choice for long distance / luxury operators. AL vehicles had zero body vibrations. (remember that most heavy vehicle bodies in India are custom built). Tata vehicles, even those with best bodies, like TVS or Allwyn (remember that company? "Hyderabad Allwyn" - had some of better bodies for city service vehicles) would vibrate when the vehicle was idling at stops, and harmonic vibrations at certain speeds was common.

Today, operators in Kerala still prefer AL for long distance routes, and stick to Tata vehicles for short haul.

The Ker SRTC is a bit more smart. While I do not have any figures, I find that more vehicles from Ker SRTC are from Tatas. And on a recent trip on a brand new Ker SRTC express bus, I was like looking at the instrument cluster in front of the driver. There was an RPM meter, and 7 or 8 other smaller meters. I cofness that I have no clue what those could be. I can guess meters like Oil pressure guage, ammeter, air pressure, fuel, probably brake fluid, engine temperature guage, etc. But there were still two or three meters unaccounted for, and I unfortunately could not have a closer look. Driver's seat, steering wheel placement, and instrument cluster were very comfy. In fact, tata heavy vehicles nowadays have a distinctly smaller steering wheel than what they used to have. There is no body vibrations at idle rpm. There is absolutely no harmonic vibrations at any speed (the vehicle touched 100 KMPH).

The Instrument cluster on brand new AL vehicles are still like what I had on our vehicles, whicl were solf off before 1989. There still continues to be the speedo, ammeter (battery charge indicator), air pressure guage (for air brake), and oil pressure guage. That is it. The steering wheel continues to be same size. Driver ergonomics is conspicious by absence (how does a non-adjustable steering parallel to ground look like?)

"All those meters would not be used anyway" is simply no excuse - even the drivers are becoming sophiscated nowadays.

In short, while AL is still where it was 20 years back, Tatas have moved on. Innovated. Even when vehicle bodies are totally custom built, Tata's insistence on selling vehicles with full front "cowl" (fully built front end, with grille, engine cover, and driver's seat in place) has meant that they are able to ensure a standard driver seating position.

[teamveevee]

AL is in a decline right now. No major developments happened with AL during the last couple of years. The JNNRUM orders helped the company stay afloat for now. Also as always Tamil Nadu government also helped with big orders when needed. AL grew when there was no major competion. They were able to sell anything to RTCs during those days. But things are changed. AL used to be the market leader in so called "Tourist" bus market. But the new players are taking over that market. State RTCs are another big consumer for AL. Last year, more TATA buses than AL were procured by SRTCs. All these shows AL is in a decline. Part of it is due to the lack of R&D investment, Poor management, lack of monetory support from the parent (Hinduja) group, and lack of meaningful collaborations. During this time, Tata Motors, revamped their products, forged major alliances and improved the quality of buses. Improvement in Tata buses, stagnation in AL and competition from foreign players helped Tata improve its market share. Also the competition from new players affected AL more than Tatas.

Does it mean the end of AL. No, they will bounce back. When it comes to transportation, the dealer/service network, financing play major roles in purchase decisions. It will take many years for the new players to establish a network like AL got. With right products and better leadership AL will survive.

One thing the author forgot to mention is the competition from Cerita/King Long. They are in an enviable position. They cost(~10Lakh) less when compared to Volvos, but the operators could charge a premium (same as volvos, almost twice that of normal charges). Also the Engine and Gearbox are the same/similar to the one already used in India (i believe sourced locally too). Recently test marketed Tata Hispano Globus are at a disadvantage here. They cost more or less the same as King Longs, but the operators will not be able to charge a premium as long as they are made by Tatas(or AL), irrespespective of, how good the comfort and ride. I heard from operators that near term, Volvos are not profitable, but every operators need to have some Volvos in their fleet to maintain the image of their company. These operators prefer KingLongs to Volvos. Also some of the RTCs also support KingLongs, examples are BEST, APRTC, MHSRTC.

Of all the new comers, one company we need to watch for is Mahindra. They have a large service network, best management team of any auto manufactures and partnership with Navistar International. The major threat to Tatas/AL dominance will come from Mahindras. But they are couple years away from being a threat. One issue with Mahindra's they are not very good with partnerships in the past, it will be intersting to see how this alliance shape up. Another interesting thing to mention is, in major cities in south India, both AL and Mahindras are sold/serviced by TVS. If Mahindras decide to sell the buses through their existing dealers, TVS will be allowed to sell buses? If TVS starts to sell Mahindra buses, what will happen to their long standing relationship with Ashok Leyland.

In the short term, Tata Motors will improve the market share, but in the long term both Tata Motors and Ashok Leyland will loose market share, major benificiaries being Mahindras and Cerita King Longs. Volvo and Benz will remain as niche players. Some other new comers will eventually fold up. [At the time of writing, i am not able to analyze/predict the Eicher-Volvo relation ship. What is not clear to me is, Is Eicher going to produce the same Volvo buses and compete in the luxury segment? or Eicher will continue making the same buses with support from Volvo and compete in the lower segment?]

[hvkumar]

Of late, Eicher is registering a strong presence with its Galaxy series - not only is it offering several models in the 12-18 tonne range but it has also started selling in the tractor segment of 25-35 tonnes. Their presence in the bus segment is limited to their traditional LCV-exCanter minibuses though. If Eicher continues to remain independent (without selling to Volvo or someone else), I would expect them to do very well.

In a recent trip to Bhutan, I saw that Eicher has completely taken over the 13-18 tonne truck market from Tata (which had a 100% markets share there till recently), and I can see the Eicher HCV numbers slowly climbing month after month.

While on AL, over 50% of its sales used to be buses a few years ago, and over 50% of its total sales in South India. But I think the equations have changed totally - AL has broken the Tata hegemony in the North Indian market especially with its 30-40 tonners, and lost heavily its market share in several STUs and with luxury bus operators, where earlier it held fort.

[Transsenger]

AL was the first to begin a JV with one of the leading International body builder - IRIZAR (spain) in India. But if we examine the net results from the same, we would be disappointed to find that, it has only been exploited in the export business. Neither AL tried to build any brand image on it nor did it develop any fullybuilt range inspite Tata bringing their "Starbus". AL was, or so to say is, concentrating on the export front with this JV. They have succeded to any extend in that regard, winning sizable orders from Gulf countries, African countries etc. The much talked about "Intercentury LUXURA" is still not to be seen. When Eicher & Tata brought quality LCV buses in the market, AL still does not have one.
Again AL has R&D tie-up for bus designs with Azad Coaches, thru which they have developed many rear-engine a/c buses for export (see pic. below - (c)azad website). Similarly Transcontinantal LLC (azad group), builds a/c luxury buses on AL rear engine chassis for gulf market. And with all these its not surprising that AL has 60% market share in gulf countries for standard buses.

So its not because they cannot, rather they have not bothered to think about domestic market. Here they show the way and Tata runs.
I believe AL is so confident or to say, overconfident about the domestic market, not considering the emerging threats.
Mahindra has done wonders with some of their products, example Scorpio, Bolearo, Loadking trucks, tourister buses. And with Navistar, sure, they are here to stand.

[tushky]

the red reae engined bus looks too simple compare to Volvo, Hispano Globus and even Cerita. wheels are small, rims are black, lights are simple.

[teamveevee]

Originally Posted by Transsenger

AL was the first to begin a JV with one of the leading International body builder - IRIZAR (spain) in India. .

Not correct. Tatas started to make fully built buses through ACGL, way back in the 90s. ACGL was also concentrating on the export market in the past.
But they used to sell limited number of fully built buses to STCs and private operators.
AL-IRIZAR partnership is relatively new [almost the same time Tata's tied up with Marcopolo] and also it is a three way partnership with TVS being the third partner. [I heard AL-IRIZAR is planning to start another manufacturing plant]. AL yet to begin supply of buses to DTC, as they could NOT make it according to the specification yet.
Also 60% market share of AL because of the State RTC's. If you consider the private operators only, then Tata got more market share. If you leave TN, then the market share for Tata's will go up even further.

[deepclutch]

I thought Most Tourist Buses are AL made-atleast in S.India.

[tushky]

caught uncovered. Mahindra Navistar Truck

[Mpower]

Looks like this is an all new model for India. Haven't seen this anywhere else.

[BaCkSeAtDrIVeR]

Originally Posted by Transsenger

AL was the first to begin a JV with one of the leading International body builder - IRIZAR (spain) in India.

Huh?

Irizar had a tie up with TVS of Madurai - the bus body builders.

Did they have a tie with AL? I would not venture to have a bet on this, but, most Irizar AL buses in KL SRTC fleet have "Irizar - TVS" on the body builder's plate. (Somewhere on the rear).

But if we examine the net results from the same, we would be disappointed to find that, it has only been exploited in the export business.

Hmm.... sort of. But I beg to differ. They were ahead of the times.

Neither AL tried to build any brand image on it nor did it develop any fullybuilt range inspite Tata bringing their "Starbus".

They did launch the first syncromesh gear box. Commercial operators refused to pay the little extra peanuts they costed to maintain. And drivers were used to shifting gears without using the clutch on AL buses. The habit continued on syncro gear box vehicles, which ruined the GBs real fast.

I ought to know. ;-)

To be fair to the drivers, when I first sat on the drivers' seat, (In my early teens, but I was an overweight for my age even then <grin>), and pressed the clutch pedal, I had to hangon for dear life onto the seat - a bit of relaxation, and I would have shot of the driver's seat - like the "canon man" in a circus. The clutch was so heavy.

AL was, or so to say is, concentrating on the export front with this JV. They have succeded to any extend in that regard, winning sizable orders from Gulf countries, African countries etc.

Yuck. Let us face the reality. Those vehicles are used to move labourers. Not as luxury buses. Those are not even midrange vehicles over there. Bottom - rock bottom err.. sub par is the place AL (and tatas) buses have over there, in the ME. I am relying on posts in this forums itself for that statement.

So its not because they cannot, rather they have not bothered to think about domestic market. Here they show the way and Tata runs.

Sad. have to agree with that. But then, looks obvious. AL is owned by the Hindujas. What else except a "global" focus?

Originally Posted by deepclutch

I thought Most Tourist Buses are AL made-atleast in S.India.

Yes. Most. CPC (manipal group) however uses Tata vehicles.

[teamveevee]

Originally Posted by BaCkSeAtDrIVeR

Huh?

Irizar had a tie up with TVS of Madurai - the bus body builders.

Did they have a tie with AL? I would not venture to have a bet on this, but, most Irizar AL buses in KL SRTC fleet have "Irizar - TVS" on the body builder's plate. (Somewhere on the rear).

The company is called TVS - IRIZAR, but it is a 3 way venture with AL.
Irizar website says "In 2001, IRIZAR expanded into India through a joint venture with Ashok Leyland and T.V.S". I believe the original TVS bus plant was upgraded with technology and design from Irizar. So TVS contribution to this venture was the existing plant.
The body of some of the old [5-7 years old] Tata buses in KerRTC were made by TVS-Irizar. Not sure whether they exclusively use AL chasis now.

The future of AL depends on iBus and it was co-developed with Azad, (not with TVS-Irizar). This shows the pathetic state of AL now.