Ashok Leyland History In Brief The King Of Indian Roads.
Ashok Leyland History In Brief The King Of Indian Roads: Are you aware of a British company, Which owned 17 Automotive Brands like Land Rover, Jaguar, MG, Mini, Triumph, etc at some time?
I am talking about the legendary company Which was earlier known as British Leyland. British Leyland was a joint venture of 2 companies, British Motor Holdings, and Leyland Motors.
The same Leyland is followed by Ashok nowadays.
When was Ashok Leyland established?
Ashok Leyland is the company that continued to produce quality buses and trucks even when the Indian market was going through a tough phase during the 60s-70s. They launched many well-engineered vehicles even during that period.
Ashok Leyland is an Indian multinational automotive manufacturer, headquartered in Chennai. It is owned by the Hinduja Group, It was founded in 1948 as Ashok Motors and became Ashok Leyland in the year 1955.
Very few people are aware of their superb innovation. Ashok Leyland was the first company to introduce a double-decker bus. Ashok Leyland is an entirely different entity and has no relations with British Leyland.
And if you want to dig deeper into the history of Indian Commercial Vehicles. Then you only need to study the history of two Indian companies. The first among those is TELCO, Tata Engineering, and Locomotive Company, Which is known as Tata Motors today, and the second one is Ashok Leyland.
Which is best Ashok Leyland or Tata Motors?
TATA Motors used to dominate the whole of North India, and Ashok Leyland has a vast presence in the market of Southern India. A similar thing could be observed even today. We know a lot about the achievements achieved and acquisitions done by TATA MOTORS.
But Ashok Leyland is less spoken of According to a report from SIAM, Society of Indian Automobile Manufacturers, Today, Ashok Leyland is the 3rd largest bus manufacturer in the whole world, and the 10th largest manufacturer of trucks in the world.
Achieving all this was not a cakewalk for Ashok Leyland because during the pre-liberalization era Ashok Leyland had permission to manufacture only 1000 trucks upon obtaining technological assistance from foreign countries, Ashok Leyland had to pay Loyalty to the government, And under the Licence regime, Ashok Leyland for its expansion was allowed to install its manufacturing plants in backward regions only.
Ashok Leyland Is The 2nd Largest Truck-Selling Company In India
Today, we will try to understand in this article spite many problems around, on one side Prior to the liberalization, many companies could not compete with the strong players in the market.
While on the other hand, Ashok Leyland grew gradually, and today Ashok Leyland is the 2nd largest truck-selling company in India. Ashok Leyland was started in the year 1948 in Chennai. At that time this company was known as Ashok Motors because this company was started by Shri Raghunandan Saran who contributed to the freedom struggle in India.
The name of his son was Ashok and the company was named after the name of his son. Immediately after the independence of India Ashok Leyland started its business by assembling and manufacturing Austrian cars and Ashok Leyland used to manufacture an Austin A40 Car in India.
During the very early days of the company Shri Raghunandan Saran, who was the founder of the company died in a plane crash. Meanwhile, the company was acquired by the Madras Government and the State Government and other Shareholders Indulged in a technological partnership with the UK’s Leyland motors.
This is the reason behind Leyland following Ashok And the full name of the company is Ashok Leyland. Apart from providing technological assistance Leyland also acquired 40% of the stakes in Ashok Motors and after this partnership, Ashok Motors for the next Seven years got the rights to Import, assemble, and progressively manufacture the spare parts of trucks.
Components were available in surplus quantity with the company but the initial days of Ashok Motors were quite challenging. As you might know that the Indian market was closed from 1950 to 1991.
Due to this, period was also termed, Licence Raj And that’s why during the initial days Ashok Leyland only got the Licence to manufacture 1000 Leyland trucks per year Initially, for a very long duration of time, the product development and technology of the company was looked after by British Leyland.
This British Leyland is the same company that I mentioned earlier in the article Leyland Group acquired a new license from the government and launched many new types of commercial vehicles in India.
Which were never seen in India before this group launched the Titan bus which was India’s first double-decker bus and this bus was completely manufactured in India and during the 1970s, India’s first rear Engine bus was launched.
During the 1970s, this company also started supplying trucks to the Indian Army Ashok Leyland was going through well during that time. But this company was not very big at that time and the management of the company was facing several difficulties in meeting the requirements of the company.
Since Licence Regime was active during that time The permission of the government was required for any company to make any changes to the vehicle. Whether the company wished to enhance the size of the tires,increase the power capacity of the vehicle Or any type of specification changes to the vehicle a licence was required for everything.
Companies have to follow various norms even today but at that time no official work could be completed without bribing the officers. This article has mentioned such type of an incident in an excellent way Due to the fear of losing their license,companies always kept their production as minimum as possible.
But once mistakenly a company manufactured 1625 industrial engines. But the company had a license to manufacture only 1500 industrial engines. To escape from paying a heavy fine,the company officials had to beg exemption from the government. This thing happened at a time when there was a shortage of industrial engines in India and not only this, a 2.5 percent technical know-how fee as the royalty cap for international collaborators was also charged by the central government.
How Ashok Leyland fought “Licence Raj”?
This means that during that time if any Indian company wants to acquire technical assistance from any foreign company then a Loyalty of 2.5 percent was also to be paid to the Indian government.
As a consequence of this, Ashok Leyland was forced to install outdated engines in its trucks and under this licensing regime a company can only install its manufacturing plants in backward regions and a license was required even for doing this.
Therefore Ashok Leyland kept its focus on Southern India for a very long time and that’s why today, It is quite visible that TATA Motors is very famous and renowned in North India.
While Ashok Leyland in South India but every time everything did not went smoothly for Ashok Leyland RJ Shahaney joined Ashok Leyland as a Managing Director in the year 1978. He joined Ashok Leyland to completely change the fortunes of this company. He brought many changes to this company as soon as he joined the company.
He was also supported by the Hinduja Group and in the year 1987, Hinduja Group acquired the stakes of Ashok Leyland which were earlier acquired by British Leyland. He also brought IVECO which is a subsidiary brand of Fiat Motors.
So that technical assistance could be provided to Ashok Leyland. Due to this, IVECO acquired 15% stakes in Ashok Leyland. Hinduja is an Indian Transnational Company which has its presence in various sectors of the world from banking to chemicals. During the 80s, Hinduja and IVECO were able to come together because during the one term of Government under Rajeev Gandhi,economic liberalization was partially opened and with this, RJ Shahaney launched many mass-market products of Ashok Leyland in India.
And under his leadership, Ashok Leyland signed agreements with Hino Motors and ZF Transmissions. If you don’t know, then let me tell you that Hino Motors is the truck division under Toyota Market liberalization in India took place in the year 1991.
Due to this, the Indian companies were free to operate according to their choice. In the year 1998, a new MD was appointed in Ashok Leyland and under his leadership,the company increased its grasp over the market and become more technologically advanced.
During the late 1990s, Ashok Leyland launched India’s first CNG-driven bus and by the mid-2000s, Ashok Leyland started expanding itself to other foreign countries Like in the year 2006, Ashok Leyland acquired AVIA company.
This company was a truck manufacturing company based in the Czech Republic Ashok Leyland installed bus assembly parts in UAE in the very same year and over this period of time, indulged in many joint ventures Like, Ashok Leyland collaborated with John Deere to manufacture construction equipment Ashok Leyland also engaged in joint ventures with Seimens and Albonair Ashok Leyland also acquired stakes in the UK-based Optare.
Which manufactures buses in the UK And Ashok Leyland also partnered with Nissan in India. So that they can develop quality light-weight vehicles in India. Now, it is not at all like, Ashok Leyland was always dependent on joint ventures for its success. By the way, the MD of Ashok Leyland, suggested the Hinduja Group to acquire the stakes of IVECO in Ashok Leyland And the same thing happened.
The MD of Ashok Leyland suggested of doing this,because Ashok Leyland did not need any technical assistance from IVECO for a very long time Ashok Leyland was capable of doing its R&D itself. Ashok Leyland hired people from Detroit in its R&D Centres. So that their technology can become more advanced.
Today Ashok Leyland is the largest supplier of Logistics vehicles in the Indian Army. Many Ashok Leyland trucks are visible on Roads as well, Especially this 4×4 Stallion truck.
If we look at the international exports of Ashok Leyland, then Ashok Leyland has a decent export Market. They have a strong grip over the SAARC Countries apart from this, Ashok Leyland sells around 4000 buses per year in the UAE.
Ashok Leyland is also present in various states of the Gulf Corporation Council like Bahrain, Kuwait, Oman, and Qatar. Ashok Leyland are exporting around 8000 to 9000 vehicles per year to foreign countries. This is a satisfying number in terms of trucks but the export number was higher than this prior to the COVID-19 Pandemic.
If we talk about the domestic market of India then Ashok Leyland is doing exceptionally well in India. Ashok Leyland is growing up by around 80% on a year-on-year basis and today Ashok Leyland is the 10th largest manufacturer of trucks in the whole world.
And 3rd largest manufacturer of buses in India Ashok Leyland is not as big as TATA MOTORS.
But the story of Ashok Leyland is very inspiring Ashok Leyland brought innovations even in a closed market and introduced many good products in India. If you found this article interesting then do share and like and tell me your thoughts about Ashok Leyland in the comment section.