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Ashok Leyland lines up new products, aims to de-risk biz from future downturns

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NEW DELHI: Hinduja group flagship Ashok Leyland plans to come up with multiple products for various segments as it aims to de-risk its business, which is currently skewed towards heavy and commercial vehicles, Chairman Dheeraj G Hinduja said on Wednesday.

The Chennai-based commercial vehicle major is all set to introduce a new range of light commercial vehicles (LCVs) later this month and is also looking at electric mobility and products for the defence sector to drive its future growth.

With a new range of LCVs and expertise in electric buses coming in handy, the company is now ready with ambitious plans for a major play in the international markets.

The company has already upgraded its heavy commercial vehicles (AVTR) range earlier this year.

“Now we are looking forward to launching later this month our new LCV range. And this is all part of the process of de-risking the company from its core medium and heavy (segment),” Hinduja told PTI in an interview.

So launch of LCV range is one of the key initiatives for the company and the in-house developed international product platform has both left hand and right hand options, and opportunities will be immense in India and overseas, he added.

Hinduja noted that lack of products was one of the prominent reasons for the company not be able to expand business across international markets.

“In overseas markets distributors want to consider if you have a good range of products. So now with AVTR and LCV range and many new buses, we now have quite a substantial range of products that we can offer in these new markets,” he added.

The company is now getting distributors and dealers in international markets who have good networks, Hinduja noted.

“A new range of buses is also in the offing strengthening the product portfolio for international operations for a greater presence in the traditional SAARC, Middle East, Africa markets as well as in ASEAN which will be the new thrust area,” he added.

Besides, the company is looking aggressively in the defence segment, he noted.

“The recent announcement by the government to internally source from within India gives an opportunity to examine what more we can do and there can be opportunities for possible collaborations as well with foreign companies which we can consider,” Hinduja said.

Noting that the future belonged to zero emission mobility, he said Ashok Leyland is well placed to deliver in the electric vehicle segment.

“With Optare (company’s subsidiary) we now have very good experience with electric buses. We are winning many tenders in the UK market..With Optare we would look at countries like the UK, other European countries, Australia and New Zealand as well ” Hinduja said.

In the domestic market also the company has electric vehicles running in Ahmedabad, he added.

“The electric play for Ashok Leyland will be quite substantial. So a combination of these initiatives will de-risk us from any future downturn,” Hinduja noted.

Enhancing digital play in products as well as services is also a critical element of a company’s future growth strategy, he said.

Earlier participating in Ashok Leyland’s 71st annual general meeting (AGM), Hinduja said in the last few months the company has re-examined business and operating models so that it not only weathers the current unprecedented times but is also be well-positioned to benefit during the economic recovery phase.

“Upon a careful assessment of the short term and long term prospects, several initiatives have been set in motion to reconfigure the company towards sustainable growth, while minimising the negative impact of economic cycles,” he said.

Currently, the management is focusing on some key enablers for long term growth in addition to the company’s traditional focus on medium and heavy commercial vehicles, Hinduja said.

On the passenger transport side, after progressive lifting of lock down, public transport is an essential component of attaining economic normalcy, Hinduja said.

“We would urge the central and state governments to develop new long term visions of public transportation by road ” he said.

Travel by buses should no longer be in the overcrowded conditions of the past and bus services should be run as per appropriate capacities and people distancing norms, he added.

“Your company is keen to engage with the central and state governments and other stakeholders to define viable solutions, including meeting potential demand for various types of buses ” Hinduja said.

He informed shareholders that the company management began taking proactive steps from as early as April 2019 to steer the company through challenging times.

“While initiatives are being implemented for reducing costs and improving productivity, we are also drawing up revenue enhancement plans across businesses which will serve as a solid foundation for the future,” Hinduja noted.

The company is witnessing a month-on-month improvement in the financial performance this quarter and therefore, believes that the third and fourth quarters of this fiscal year would see a significant improvement in performance if the current trend continues, he added.

For the first quarter ended June 30, Ashok Leyland had reported a consolidated net loss of Rs 388.82 crore owing to the coronavirus pandemic.

In comparison, the company had posted a net profit of Rs 274.96 crore for the April-June 2019 quarter.

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Kia Motors breaks into operating profit in its first year of India journey

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MUMBAI: South Korean automaker Kia Motors has become one of the quickest to turn operationally profitable in India’s highly competitive passenger vehicle market.

In fiscal 2020, the first year of its operation in India, the company produced more than 100,000 vehicles and posted revenue of Rs 10,838 crore, when the domestic market delivered its worst performance in a decade.

Kia posted an operating profit, or earnings before interest, tax, depreciation and amortisation, of Rs 308 crore in the year ended March 31, 2020, according to its filings with the Ministry of Corporate Affairs. Interest pay-out and a significant depreciation cost, however, pulled Kia into a net loss of Rs 326 crore for the year.

In the ongoing fiscal 2021, if Kia manages to attain its target of producing 200,000 vehicles, the company may post a turnover of nearly $2.4 billion (Rs 17,000 crore), as per ETIG analysis.

It had sold more than 105,000 units in the last fiscal year where exports contributed about a fifth of the total volumes.

In a market where global behemoths like General Motors, Ford and Volkswagen struggled to cross a 2-3% market share even after being present for over a decade, Kia has grabbed a 5% market share so far in FY21 and is knocking at the podium just behind Tata Motors and Mahindra & Mahindra.

With just three products in its portfolio, which are all utility vehicles, Kia now has a 13-15% market share in the segment.

The combined turnover of Kia and sister company Hyundai Motor in India was 63% of market leader Maruti Suzuki’s turnover in FY20. Their combined market share was about 23-24%.

Kia had invested Rs 8,771 crore in its Indian operations till FY20, out of which Rs 2,501 crore was made in the previous year.

Its average realisation per vehicle was Rs 10.2 lakh in FY20, which was 1.5-2.1 times that of the top two car makers — Maruti Suzuki and Hyundai.

The revenue of Kia was nearly equivalent to the passenger vehicle division of Tata Motors, however there is a sharp contrast in the operating profit picture of the two companies. Kia posted a margin of 2.9% in FY20, while for Tata Motors, it was a negative 9.8%.

The operating profit margin of Maruti Suzuki and Hyundai were 9.7% and 10.06%, respectively.

A strong volume performance of the Indian subsidiary is helping Kia Motors grow its size in the global operations. Contribution from India grew to 3.9% of Kia Motors’ global revenue in the July-September quarter from 1.4% a year earlier, according to a company presentation.

The Indian unit’s vehicle dispatches grew 175% in the September quarter, the highest in any market for Kia Motors globally.


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Transport ministry proposes changes to help appoint ‘legal heir” of a motor vehicle

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NEW DELHI: The ministry of road transport and highways has proposed to ease the transfer of ownership of a vehicle after the owner’s death, by adding a nominee at the time of registration.

The change has been proposed in line with the practice of nomination while opening a bank account, or health insurance policy.

“It is generally a long-drawn process if the vehicle is in the name of a single person, a family member has to prove that they are the legal heir if they want the vehicle to be transferred to their name,” a transport ministry official told ET.

Now, the vehicle will now be automatically transferred in the nominee’s name if they upload the owner’s death certificate on the Vahan website, the official added.

Nomination facility is proposed to be incorporated at the time of registration of the vehicles. The proposal will help family members of the deceased person to transfer the ownership of the vehicle in a hassle-free manner. Vahan database maintained by the ministry of road transport and highways is an online repository of registered vehicles in the country.

“This would help the motor vehicle to be registered or transferred in the name of the nominee, in case of the death of the owner of the vehicle,” the transport ministry said in a statement on Friday.

“The process is otherwise cumbersome and non-uniform across the country,” it added.

The ministry has invited suggestions and comments from the public and all stakeholders on the proposed amendment to the Central Motor Vehicles Rules, 1989 in this regard.

The ministry has proposed changes in certain rules to incorporate “proof of identity of nominee, if any” to enable the owner to nominate anyone to be the legal heir of the vehicle in case of death.

It has further been proposed that in case where the nominee is already specified, the vehicle will be transferred in the name of nominee and nominee will have to upload the death certificate on the portal to inform the registering authority and apply for a new certificate of registration in his name through the portal which will be faceless if Aadhaar authentication is chosen by the nominee.


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Only BIS-certified helmets to be made, sold in India for two-wheelers

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NEW DELHI: The government on Friday said only Bureau of Indian Standards (BIS)-certified helmets would be manufactured and sold in India for two-wheelers.

This would help in avoiding sale of low-quality two-wheeler helmets in the country, which would help in protecting persons involved in accidents from fatal injuries, the Ministry of Road Transport and Highways said in a statement.

“The Ministry of Road Transport and Highways…has issued the ‘Helmet for riders of Two Wheelers Motor Vehicles (Quality Control ) Order, 2020′.

“Protective helmets for two-wheeler riders have been included under compulsory BIS certification and the publication of the Quality Control Order,” it said.

Following the directions of the Supreme Court Committee on Road Safety, a committee was formulated to consider lighter helmets in India suiting the country’s climatic conditions and that for ensuring compliance among citizen to wear the helmets.

The committee had experts from different fields, including expert doctors from AIIMS and also from BIS.

The committee in March 2018, after detailed analysis in its report, recommended lighter helmets in the country, and the ministry accepted the report.

According to the recommendations of the committee, the BIS has revised specifications through which it is expected to make lighter helmets.

The total number of two-wheelers being manufactured in India annually stands at about 1.7 crore.

The International Road Federation, a Geneva-based global road safety body working for better and safer roads worldwide, welcomed the road transport ministry’s move to bring helmets for two-wheeler riders under the mandatory BIS regime.

“This much-awaited move means the sale of non-BIS certified helmets will be an offence once the notification comes to effect,” K K Kapila, president emeritus of the International Road Federation, said.


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