Bagging contracts for mine-protected and bullet-proof vehicles from security agencies, Ashok Leyland is targeting three-fold business increase from its defence vertical, a top company official has said.
The company will be investing around Rs.600 crore towards capital expenditure in setting up plants in Andhra Pradesh and Telangana in India and Ivory Coast in West Africa.
Ashok Leyland also showcased its range of vehicles based on Intelligent Exhaust Gas Recirculation (iEGR) technology for Bharat Stage IV (BS IV) emission norms-compliant engines at its Global Conference 2017 held here.
"We have recently won the tenders for the supply of mine-protected vehicles and bullet-proof vehicles. Currently, the revenue from defence business is around Rs.500 crore. We will grow our defence business three times," said Vinod K. Dasari, Managing Director.
Dasari said work on the company's plants in Andhra Pradesh and Telangana was expected to begin in a couple of months after the land was acquired.
Speaking about the company's international focus, Dasari said the plan is to sell one vehicle overseas for every two vehicles sold in India and towards that new assembly plants were being set up in Ivory Coast and Kenya and expanding the facility at Ras Al Khaimah, in Dubai.
Dasari said the company is also developing a new platform/architecture for building modular vehicles.
Speaking about the iEGR technology, Dasari said it is simple and innovative solution were being sought to meet the BS IV emission norms.
He said iEGR technology is more suited for Indian conditions than the Selective Catalytic Reduction (SCR) and provides better mileage — up to 10 per cent — as compared to BS III engine.
Interestingly, Daimler India Commercial Vehicle (DICV) recently launched its trucks with SCR technology.
Dasari said the SCR technology adds at least 100 kg to the vehicle weight whereas iEGR technology does not impose any additional weight.
He said Ashok Leyland was left with 10,664 BS III vehicles and the company has started replacing the old engine in those vehicles with the iEGR technology-based engines.
When pointed out that Daimler has not revised upwards the rpice of its BS IV compliant trucks, whereas Ashok Leyland had said there would be a price hike of around 10 per cent, Dasari said for a company cost is real whereas the selling price is a strategy.
He said Ashok Leyland had 32 per cent market share in the commercial vehicles segment at the end of the last fiscal and is not chasing market share.
Dasari said the company was looking at profitable growth and has been turning away several state transport corporation (STC) business proposals as the returns were not good.