Ashok Leyland sticks to trusted truck in defence plans

Goa: Is there life beyond the Stallion for Ashok Leyland Ltd’s defence ambitions?

The tough truck from India’s second largest truck maker by sales has served the Indian Army for decades, but its maker has no plans to diversify into other defence segments like many of its Indian peers.

Ashok Leyland is the largest supplier of logistics vehicles to the Indian Army. Close to 70,000 units of Stallion trucks—technically, medium-duty defence vehicles—are in use, serving in icy mountains and hot deserts.

Rival auto companies such as Tata Motors Ltd and Mahindra and Mahindra Ltd have developed capabilities of building defence products across all platforms for the Indian Army, Indian Navy and Indian Air Force. However, Ashok Leyland has restricted itself to supplying for the army, and that too mobility solutions where the company has core competence.

Nitin Seth, president (light commercial vehicles and defence) at Ashok Leyland, said the company does not have the technology to build guns or ammunition.

“The core competence of Ashok Leyland lies in providing mobility solutions for Indian armed forces and mainly Indian Army. We provide contemporary, reliable and cost-effective products backed by good after-sales to the armed forces. Ashok Leyland has not ventured into products beyond mobility vehicles for Indian Air Force, and Indian Navy since the requirements are different from the core competence of Ashok Leyland as of today,” Seth told Mint at the DefExpo event.

Ashok Leyland, however, is gingerly stepping outside the Stallion zone.

“There are 70,000 Stallions in service with Indian Army. Ashok Leyland has moved its capability up to High Mobility Vehicles (6x6, 8x8, and 10x10) and down to the Light Vehicle platform with Lockheed Martin Corp. The strategy to move beyond mobility vehicles shall be decided based on various Make in India opportunities which the government shall lay out in new DPP (defence procurement procedures),” Seth said.

Last week, Hinduja Group’s Ashok Leyland Defence Systems Ltd (ALDS) tied up with Lockheed Martin to develop combat vehicles for the Indian Army.

The base platforms of Lockheed combat vehicles will be used to develop light specialist and light armoured multi-purpose vehicles for the Indian Army.

“As the largest provider of logistics vehicles to the Indian Army, Ashok Leyland has a strong portfolio in the defence sector. This partnership will not just further India’s ambitions under the Make in India programme, but help us provide robust and meaningful solutions to armed forces across new domains and geographies. We are buoyant about the defence segment, and expect our play to increase manifold,” Vinod K. Dasari, managing director of Ashok Leyland, said last week.

With the Indian armed forces looking to modernize their armoured vehicle fleet, there could be more opportunities ahead.

“This (tie-up with Lockheed Martin) is the example of moving down from Stallion (4x4) and making light vehicles. The base platforms of Lockheed combat vehicles will be used to develop light specialist and light armoured multi-purpose vehicles of the Indian Army,” said Seth.

He said the company has plans to go up to 12x12 Super Stallion as a part of moving up.

India’s defence ministry has approved a new defence procurement policy (DPP), bringing into effect measures to promote indigenization and self-reliance in defence.

The new DPP has enabling provisions for utilization and consolidation of design, development and manufacturing infrastructure available in the country are included in the proposal.

However, analysts are not upbeat about the programme.

A 21 January report by domestic brokerage ICICI Securities Ltd said indigenisation of Indian defence army platforms is not quite exciting.

ICICI Securities said compared to an envisaged indigenous share of 70% in Indian Army heavy moving vehicles, a mere 38% was achieved.

Ashok Leyland is waiting and watching how the landscape of defence manufacturing is shaping up to decide whether the company wants to jump onto the bandwagon or not.

However, the Hinduja Group company is forging the right tie-ups with international defence contractors.

Seth said the company has a strategic relationships with global original equipment manufacturers (OEMs) such as Lockheed Martin, Saab AB and Nexter Group.

“Until now, we are making products close to vehicles. We are not averse to expanding beyond our core competence in future with strategic partners,” he said.

Seth said the company had expanded into the export market by selling defence products in countries such as Tanzania, Nigeria, and Thailand. Ashok Leyland will expand further into the Middle East, Africa, and South-East Asia as a part of its global expansion plan, he said.

Why is Ashok Leyland not bidding for the Indian Army’s Futuristic Infantry Combat Vehicle (FICV) project?

Seth said Ashok Leyland had deliberately stayed out of the FICV project as a prime contractor since it is a very complicated combat vehicle, but could partner with other companies in a consortium.

FICV is an armoured vehicle for the infantry to keep pace with tanks or a tracked vehicle with a capability to carry a crew of three and eight combat-kitted infantry men.

In July, the ministry of defence invited expressions of interest for building the FICV, which will replace the Indian Army’s 2,600 infantry carriers, after five years of delay.

Tata Group, Mahindra Group, Larsen and Toubro Ltd, Punj Lloyd Ltd, Bharat Forge Ltd, Anil Ambani’s Reliance Group and Ordnance Factory Board are some of the bidders for the project.