Optare plays part in Ashok Leyland’s bus export drive

Ashok Leyland, parent company of Britain’s Optare bus making business, is targeting five country clusters — West Asia, Africa, Russia, Asean and Latin America — to either export to or start local operations.

In an interview with the Indian business media last week, Vinod K Dasari, Managing Director, Ashok Leyland, said the company is looking beyond its traditional export markets of Sri Lanka and Bangladesh for new customers for its wide range of buses.

Last year, the company hired Per Gustav Nilsson from German truck-maker MAN as Executive Director, International Operations, to spearhead this strategy.

In the interview, Mr Dasari said the idea is to either take Indian products to these market clusters or bring in multinational products. For instance, he said, buses from Optare are already being sold in South Africa. Ashok is also selling products from its Avia truck plant in Prague, Czech Republic, to customers in Singapore. Ashok’s plant in Ras-al-Khaimah in the United Arab Emirates achieved full capacity last year, rolling out four buses a day to West Africa and West Asia. Some buses for African markets also supplied direct form Ashok facilities in India.

Mr Dasari explained that the company believes in entering markets by partnering with local players that have both market access and knowledge. Ashok Leyland provides a chassis or chassis kit, on which the local player builds the body. Later on the company introduces CKD kits of components for local assembly.

“This strategy has worked well in markets such as Russia and Ukraine”, said Mr Dasari, and we now have local partners in Chile and others coming forward in Vietnam, Malaysia and Indonesia”.

Though Ashok Leyland is keen to have local partners, it is not averse to acquisitions. “Even a big ticket acquisition. But it must give us two things: market access and technology. We will not acquire companies just to make ourselves bigger”, said Mr Dasari.

Exports grew to 25 per cent of Ashok’s total sales last year and amounted to 12,852 vehicles.

Jim Sumner, Optare’s CEO, commented: “Being part of Ashok presents us with tremendously exciting opportunities in export markets. Our breakthrough contract in South Africa is but the first of a series of opportunities we are working on combining Ashok’s marketing and financial muscle with the excellence of Optare’s low floor and low carbon designs”.