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Ashok Leyland

BSE: 500477|NSE: ASHOKLEY|ISIN: INE208A01029|SECTOR: Auto - LCVs & HCVs
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Chairman's Speech (Ashok Leyland) Year : Mar '19

Dear Shareholder,

With great pride, I would like to share that in 2018-19, Ashok Leyland has achieved its Vision to be among the global top 10 players in medium and heavy trucks and top 5 in buses. This is a significant achievement in the annals of our Company considering the ever-changing market dynamics and increasing competitive pressures. You will be happy to note that not only did we achieve the volume aspiration but have also positioned one of the widest range of competitive vehicles in the medium and heavy duty segment. On your behalf,

I would like to take this opportunity to record our sincere appreciation to the tireless efforts of the team, ably supported by various partners across the spectrum for this feat. Not to rest on its laurels, the team has come up with a more ambitious Vision to be among global Top 10 in commercial vehicles, which is a giant leap from where we are, but I have no doubt that we will be in that position soon.

Moving on, you will be pleased to note that your Company continued to make strides in 2018-19 in its growth journey. Some of the high points are:

Sale of 131,936 medium and heavy commercial vehicles in the domestic market registering an increase of 13.2% over last year despite the dampening effect of revision in axle load norms and NBFC liquidity crisis. Within this, attaining market leadership in 4x2 haulage segment with a 40% share is laudatory. In the Bus segment, there has been a significant market share increase in South, and we have also sustained leadership in the private medium duty segment.

In the Light Commercial Vehicle segment, record sale of 54,508 vehicles was made clocking an impressive 26% increase over the previous year with market share gains in each of our product segments.

The revenue from spare parts has doubled in the last 3 years with improved operational efficiency and higher market penetration.

The power solutions business off-take has grown by 17% over previous year. The Customer Solutions Business is progressing well on its course.

Performance of International Operations has been tepid due to market slow down in target countries and in the Defence side, while order pipeline is improving and tenders are being won, a surge in sale is expected in FY20 when budgetary constraints are expected to be removed.

Among India''s best brands, Ashok Leyland moved up from 37th to 34th position validating some of our corporate and market promotion initiatives.

On CSR, under the Road to School programme, from a modest beginning of covering 4000 children in 36 schools, we now address 333 schools and 34,000 children and we are targeting to reach 100,000 children in the next 2 years.

To sustain the growth momentum and maintain the technological edge, as always, we have been investing in extending or reinforcing our product profile. On the Truck side, eight new variants were introduced as dictated by customer needs covering intermediate and heavy range for specific applications and they have been well received. Dost which was introduced earlier as a variant in the Light Commercial Vehicle segment won three awards adjudged Pick up of the Year by Apollo as well as ET and SCV of the Year by ET.

There are a few key product actions on the anvil to make us future ready.

The highlights are:

As you are aware FY20 is a period for all players to get ready for BS VI launch by April 1, 2020. Unlike global majors, Indian players are required to leapfrog from BS IV to BS VI in just 3 years. This is a steep challenge for both OEMs and the ancillary sector. In this regard, I am pleased to confirm that our state of readiness is next to none in emission conformance and fuel performance.

Concurrently, we are also rolling out our Modular Vehicle Programme, that enhances flexibility to meet customer needs in a cost-efficient way.

Building on the success of the current Light Commercial Vehicle range, a suite of products in a new platform is being readied for launch from April 2020.

Our Electric Vehicle strategy and roll out plan is in shape. A competent team has been put in place to pursue this thrust area vigorously.

This industry, like all others, is likely to see disruptions in the new Digital Age. Foreseeing the changes, your Company is taking steps to ensure that it stays ahead of the game, whether it is in our products, technology, or service, always keeping the central focus on its customers. We intend to take our success in the Indian market also to new International frontiers with a wide array of products in trucks and buses.

Looking ahead, a stable government which has assumed office recently augurs well for the Indian business and industry. Pertinent to the Commercial Vehicle Industry, in the short to medium term, we anticipate continuance of investments in infrastructure, revival of defence mobility spending and the much-needed relief to the liquidity challenges of NBFCs. While the expected pre-buy in FY20 on account of introduction of BS VI from next year could provide the surge in demand in the second half of this year, it is important that the government and the industry bodies consultatively provide a long-term direction or a policy guideline to the auto sector that include policy pronouncements such as vehicle scrappage, cab code or bus body code. This would provide the impetus to Indian Commercial Vehicle sector to transit to the global premier league and also help optimise resources.

It is my strong belief that our ability to overcome challenges and not be daunted by the hurdles ahead stems from the unflinching support of our dedicated and capable people across the organisation. My appreciation to each one of them for enabling our continuing success in our endeavours.

With all of us committing to respond faster in meeting customer needs and aim higher in our aspirations, I envision a greater Ashok Leyland in the near future.

I would also like to thank our extended family of shareholders, customers, dealers, suppliers, financial institutions and strategic partners for their guidance and support.

Thank you,

Yours sincerely,

Dheeraj G Hinduja

Chairman

July 1, 2019

Source : Dion Global Solutions Limited
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