R.Seshasayee: "We are not taking the new competition for granted at all"

Do you see the landscape in India with respect to commercial vehicles changing in the next few years? What will be Ashok Leyland’s strategy?
R. Seshasayee: Clearly, the next wave of future investments, the next wave of major OEMs coming into the Indian market will happen in the medium and heavy duty commercials segment. We have already seen evidence of this. You have got all the big marquees announcing their plans to come in here either by themselves or in partnership with local players.

So, first thing I would like to say is that we are not taking the new competition for granted at all. On the other hand, we understand that this is going to be a big challenge, a kind of challenge which we have not witnessed in the last several decades when the market was literally a duopoly.

But we equally understand that the way to preserve our competitiveness is to focus on what I just said: Not merely a product technology but the offering of the correct product, correct value systems, getting the informal support systems to work for you which is what I think is the key part of the learning. So, in a way our future is going to be driven by these critical issues. Second, while I say that, it does not mean that we sit back with the product; the product upgradation and the product technology is a hygiene issue and we have to be competitive in that.

What exactly are you working on currently?
Seshasayee: We are doing several things. The first component is the chasis itself. There we have this Unitruck chasis, which is benchmarked to the best in the world, appropriately incorporating the requirement of the Indian market in terms of its features and in terms of its contents. The Unitruck platform is a modular platform which is capable of giving the right kind of value delivery at a very competitive price performance point.

The second element of this is the drive train. We are now almost at the threshold of introducing this new range of engines which is called the Neptune range which comes again in a modular fashion — 4 cylinder from 6 cylinder versions going from 160-380 horsepower and again benchmarked to the best and we have looked at price performance points here again as the very goal or the mission objective of the entire project.

The third part is the part relating to the cabin. We have the current NEWGEN cabin which is already in the market in small numbers; we will scale this up now significantly in the forthcoming year. But we have also told ourselves that this has to be replaced by the next generation cabin which will be again modular and answer the price performance point which will in a way saddle both the capability to deliver the most cost effective, high end driving for the Indian driver as well as for exports. That’s again been challenging.

So, we would be bringing this around 2011-12. Now, the three elements which make the technology, we will be on par with anyone at a significantly lower price point and we believe at a significantly higher performance point.

How is this different from your earlier approach?
Seshasayee: I must say that this marks a huge departure from the earlier manner in which we had done product development which was somehow linear which we did stage by stage. We are now taking a clean sheet of paper and we have developed these products to deliver new levels of value to the customer. So, we have benchmarked this with all that’s available and I don’t think we have anything to worry about in terms of the product technology.

Do you think measuring up to competition in product technology is going to be sufficient?
Seshasayee: No, just the product technology measuring up to competition is not going to be sufficient for us to defend our markets and that can come in only by the two things that I mentioned.

One is getting a very, very clear understanding of the customer values and delivering exactly that and the second part is to build the informal support structure which is outside the periphery of the factory. Both of this will not only help in defending but can also be used as offensive techniques for our further penetration.

As regards [to] the first one, you know we have been around for 60 years and we tend to think that yes we understand the customer voice but truly we need to do a lot more because it is not merely listening to the customer about what he wants but what his latent demand is likely to be.

We went through a formal process of training our executives in listening to the voice of the customer, we engaged Dr. Shoji Shiba to do training in how to listen to the voice of the customer and we did lot of training on language processing and so on. And we simultaneously formed several domain expert groups. We call this process customer inspired solution and these are the basis of what we want to design and deliver. So, this has been, to my mind, a path breaking kind of exercise and it has revealed a lot to us in terms of what the customers are likely to be demanding.

Vinod Dasari: Yeah, not only did we learn how to listen to the customers better than before, what we found that the voice is also changing as the demand of the markets are changing and as the customers are getting more knowledgeable as they have more and more options available.

So, one of the key things that we learnt is, rather than say that we are in the business of selling tippers or trucks, if you listen to the customer and understand his latent needs, he is saying give me a solution that encompasses that I am becoming more profitable as I build roads. So, one of the cornerstones was, we have always said that we will increase our market share by focussing on the profitability of the customer; as long as he is more profitable we will get more market share but to just increase his profitability we can’t be just focus on making our trucks better and better. You have to meet his latent needs.

What’s been the trigger behind this realisation?
Seshasayee: You know cultural change is at the bottom of all this. A cultural change supports all this and I think over the last 10 years we have made a lot of cultural change in the sense that there is no holding back, there is freedom to talk and come to conclusions. I think this is one very, very important change which supports all the rest. If it would not have been there, there would have been silos and it would have been a lot more difficult to make it happen.

The people is more of a challenge, it takes much longer. We have done many things in that; one is in the last few years in key areas we have brought people with international experience. In product development we have today people who have worked in global OEMs, number of doctorates, in fact large numbers we were able to pick up from Detroit because of the situation there. This is a very diverse group of people who have come together. In addition, we have been pushing this people initiative to make the organisation younger, more innovative and that’s where we started the YES programme [Young Executives Programme] which has been there for four to five years.. That by itself has been a major challenge. I think the people and process ability is what will support our strategic decision.

We had, in fact, no touch with our customers because we were dealing with very powerful dealers. All of this has been built brick by brick. One major change was when Iveco ceased to be our partner I think in a way that was a second major turning point. One could say it was a cause and an effect. It was a cause because it clearly meant that you had to be on your own and an effect because we had sufficient confidence in us to say that yes we can do this on our own. Personally, I certainly had the confidence at that time that yes we can do it and as a company build those capabilities. At that point did we have the capabilities? No!