In a joint venture, Ashok Leyland opens new assembling facility in Dhaka.

[rome333]

Runner group setting up another plant for Eicher and its going to be online by the end of this year or beginning of the next.

 

[Bilal9]

What is interesting in Indian media is that they claim:

"Ashok Leyland on Thursday announced the opening of its new assembly plant in Bangladesh............................................ The project is a collaboration between the company and IFAD Autos of Bangladesh. The latter will invest around Rs 75 crore in the facility."

If IFAD Autos is investing Rs. 75 crore then how is it Ashok Leyland's plant?? What the hell did they invest? Most likely zilch.

Some Indian journalists' logic.......

In my opinion, these IFAD guys (as well as Runner with Eicher) should increase indigenous content ASAP and then do to them what AL and Eicher did to British Leyland and Mitsubishi - respectively.

I cannot congratulate IFAD and Runner on the choice of their partners - but the sooner the divorce the better.............

 

[Nilgiri]

What is interesting in Indian media is that they claim
"Ashok Leyland on Thursday announced the opening of its new assembly plant in Bangladesh............................................ The project is a collaboration between the company and IFAD Autos of Bangladesh. The latter will invest around Rs 75 crore in the facility."

If IFAD Autos is investing Rs. 75 crore then how is it Ashok Leyland's plant?? What the hell did they invest?

Some logic.......

http://www.thehindu.com/business/Ashok-Leyland-opens-new-assembly-plant-in-Dhaka/article17146888.ece

IFAD Autos will be investing ₹75 crore, while the investment details of Ashok Leyland was not made public, said company sources.

75 crore INR is about 11 million USD. Doubt thats going to cover the majority of capital costs of even a measly 800/mth facility.

Its ok evil baniya Dada is here to do the heavy lifting once again...while you safely sleep content that it should be "zero" because specifics are unreported right now.

BD "Logic" in play

 

[rome333]

What is interesting in Indian media is that they claim:

"Ashok Leyland on Thursday announced the opening of its new assembly plant in Bangladesh............................................ The project is a collaboration between the company and IFAD Autos of Bangladesh. The latter will invest around Rs 75 crore in the facility."

If IFAD Autos is investing Rs. 75 crore then how is it Ashok Leyland's plant?? What the hell did they invest? Most likely zilch.

Some Indian journalists' logic.......

In my opinion, these IFAD guys (as well as Runner with Eicher) should increase indigenous content ASAP and then do to them what AL and Eicher did to British Leyland and Mitsubishi - respectively.

I cannot congratulate IFAD and Runner on the choice of their partners - but the sooner the divorce the better.............

IFAD must invest as AL is providing its technology and support. Its same as opening up MacDonalds resturant. Our backward linkage auto industry will surely benefit,if govt maintains its policy support. Like Runner said they are evaluating whether to start making some equipments here for its Eicher. Policy Support from govt is the main factor.

 

[Nilgiri]

In my opinion, these IFAD guys (as well as Runner with Eicher) should increase indigenous content ASAP and then do to them what AL and Eicher did to British Leyland and Mitsubishi - respectively.

Sorry no brains and IQ in BD to do that. Just locked in and totally dependent supply chain contracts with Dada.

I'm still getting over 800/mth being this much of a big deal for BD. What a truly tiny, malnourished market.

I cannot congratulate IFAD and Runner on the choice of their partners - but the sooner the divorce the better.............

No one cares. You have no say over it so your congratulations or lack of mean squat. Try get a better deal from your best friend China next time....or maybe you have to commit to something more reasonable like 8000/month before they are interested. Give your sovereign fund a couple decades to grow so you can afford to do that at that point.

In the meantime, multiple 10,000/month facilities being set up in India front, left and centre which BD companies will naturally piggy-back off....and you cry about it for years....wailing for a "divorce" and "better partner choice".

Hope you read this so you can go to bed nice and butthurt.

 

[TopCat]

http://www.thehindu.com/business/Ashok-Leyland-opens-new-assembly-plant-in-Dhaka/article17146888.ece

IFAD Autos will be investing ₹75 crore, while the investment details of Ashok Leyland was not made public, said company sources.

75 crore INR is about 11 million USD. Doubt thats going to cover the majority of capital costs of even a measly 800/mth facility.

Its ok evil baniya Dada is here to do the heavy lifting once again...while you safely sleep content that it should be "zero" because specifics are unreported right now.

BD "Logic" in play

This is a bus assembling plant. I dont think that kind money even required. They probably inflated the investment to squeeze money out of the bank and diverted in their flour and rice business, which gives far more return than importing Ashok bus.

 

[Bilal9]

IFAD must invest as AL is providing its technology and support. Its same as opening up MacDonalds resturant. Our backward linkage auto industry will surely benefit,if govt maintains its policy support. Like Runner said they are evaluating whether to start making some equipments here for its Eicher. Policy Support from govt is the main factor.

Bhai there is not an overwhelming amount of 'technology' required in hot-stamping sheet metal and screwing together panel parts in bus/truck assembly plants. I can understand AL's plant organization experience which while valuable is probably not world class but 'appropriate technology' as it relates to South Asia.

And I'm also willing to admit that they have a few years of HCV-assembly experience ahead of Bangladesh.

But India is no Japan (not even China or even Thailand). Just take a look at AL plant for MCV's in Hosur, Karnataka below. This is no plant with KAIZEN or JIT principles. Its just underpaid under-trained guys screwing together parts.

IFAD should have tied up with IVECO (Italy) for plant organization and setup, not AL.

IVECO was AL's former partner as was British Leyland. Waste of IFAD's money in my opinion and a short-sighted decision .

Meanwhile - Dongfeng truck assembly line in Shiyan, Hubei province.....

The main reason AL is expanding to HCV export markets like Bangladesh is that they are a dismal player in the Medium Commercial Vehicle and Light Commercial Vehicle segments in India, even after four/five decades there, which have been the segments with the most growth. TATA is very strong in all the segments, including HCV's, which is also AL's strength - however TATA is far stronger in indigenous R&D, unlike AL. AL is mostly located in the South and they have not aggressively attacked North Indian HCV/MCV markets, which is TATA territory. As I mentioned, they are still a very weak player in the LCV market in India.

However - in the last couple of years market-share in the Indian HCV segment for AL has also been steadily sliding because of new aggressive brand JV entrants in India's truck segment. New heavyweight commercial vehicle (15t plus) entrants are behemoths Daimler Benz, Navistar from US and smaller players like MAN, Volvo, Saab-Scania etc.

So AL had no choice but to expand into export markets and tie up with the likes of assemblers like IFAD. Bad deal for IFAD, great for AL.

 

[rome333]

TATA's main strength in BD is its network, spare price and availability and cheap financing. But the current Perception among BD HCV owners is that AL and Eicher is better than TATA in quality and reliability.
In HCV section I also wonder why we did not get brands from China as they are also chaep. As for joint venture, I agree you 100%.
I guess World dont see our FCV market as big enough. Theorically our Railway suppossed to take care of Bulk Cargo movement. So in the coming times we may see more reliance on Rail for Bulk Cargo than HCV.
@Bilal9

 

[Bilal9]

Tata had already intro'd their best truck 'Prima' in Bangladesh. They got the design from Daewoo Truck Division which they bought earlier (definite Korean/JDM truck design). NITA which is Nitol Motors-TATA JV in Jessore will eventually assemble this Prima version but for now they are assembling five and seven ton MCV models which have higher demand.

http://www.autocarpro.in/news-international/tata-motors-launches-prima-bangladesh-8465

NITA also assembles other TATA LCV's and mini-haulers such as smaller half-ton ACE variants.

TATA's main strength in BD is its network, spare price and availability and cheap financing. But the current Perception among BD HCV owners is that AL and Eicher is better than TATA in quality and reliability.
In HCV section I also wonder why we did not get brands from China as they are also chaep. As for joint venture, I agree you 100%.
I guess World dont see our FCV market as big enough. Theorically our Railway suppossed to take care of Bulk Cargo movement. So in the coming times we may see more reliance on Rail for Bulk Cargo than HCV.
@Bilal9

Our truck market is not as large as India but for the size of our country large enough. The European companies know about Thailand but not about us.

But like the rest of the subcontinent (and the CAB/BUS market here) our truck market lacks large professionally run trucking carriers like in the Western countries. Having well-organized trucking carriers means they will look at better trucks and see them as fleet investments and less as personal assets which is the case right now.

http://www.joc.com/trucking-logistics/top-50-trucking-companies-2012

In the subcontinent truck market (especially HCV) is fickle because fuel economy and parts prices are what drives market acceptance of HCV products and trucking sector is disorganized/not professionally run.

The Chinese trucks are reasonably priced and very modern but no business here has started representing Chinese trucks yet with spares support (the likes of Dongfeng Trucks). But believe me - it will happen.......soon enough.

Rail can compete but it is state run so maybe a wash.

Competition for trucks (especially in terms of container transport) will come from Riverine container transport. I have written about this in other threads.

 

[rome333]

Also heard Runner CEO telling they are about to assemple LPG based tri-wheeler locally with Bajaj rather than importing readymade.

 

[Nilgiri]

This is a bus assembling plant. I dont think that kind money even required. They probably inflated the investment to squeeze money out of the bank and diverted in their flour and rice business, which gives far more return than importing Ashok bus.

A typical city AL bus in India goes for about INR 16 lakh or so....thats about 25 grand USD.

So you are saying a 11 million USD capital investment gives 100% return in gross revenue (on a 800/mth capacity) in about 2 weeks? Heck it is technically less time given all that money being "diverted"....not to mention not all 800 vehicles will be buses (and trucks cost more).

Even if we assume profit margin only at less than 10% per bus/truck, thats a ridiculous short time for ROI on 11 million initial investment.

OK! BBS style Math + logic STRONK!

But like I said, no need to worry, Dada doing the heavy lifting as usual...and will get the far larger portion of the profit pie given the tariffs bypassed. Its obvious 11 million investment isnt going to get a 800/mth capacity....no where close to it.

If you want to challenge me next time better, do a little simple math before Biman fatty.

So AL had no choice but to expand into export markets and tie up with the likes of assemblers like IFAD. Bad deal for IFAD, great for AL.

Its exactly what is needed. Our worst being imposed on BD and being shown to you as all you can afford....while you sit in the US crying.

IFAD....no one even heard about this company outside BD....and you are dissing on AL lol. Like I said no one else is running to do any sort of assembly work in BD in a major way (in the BD context) so beggars cannot be choosers.

Have you thought how insulated AL wants to keep this deal (so their brand value doesnt get the BD swamp stink)....a pure exploitation of the puny BD market for CV (heavy, mid or light)?

Plus no the market is NOT ok for your population size. The BRTA stats expose how negligible your demand is for any sort of vehicle. Live on our handouts, its all you will be getting. Chinese and western truck companies need you to grow big league before they even bother to look at malnourished BD economy.

 

[somebozo]

AL bus and truck are far better in quality and looks that TATA..

 

[Bilal9]

AL bus and truck are far better in quality and looks that TATA..

While I respect your opinion, I beg to differ.

In Heavy fifteen ton plus truck segment in Bangladesh, Tata trucks are superior and more popular to AL. Plus Tata spares I believe are cheaper. Tata also enjoys more reliability in the 'Indian' sense, parts are heavy, over-engineered and anvil-like, ensuring long service.

The same cannot be said of AL. Even AL's ToT partner IVECO used to have bad reputation about reliability sometime ago. IVECO is the truck arm of FIAT sPA.

AL's HCV truck offerings are not that spectacular or modern compared to Tata's. Maybe one of the Indian Auto experts can comment.....

Here is Tata's Daewoo-designed top of the line Prima Semi-tractor (Daewoo trucks is a Tata subsidiary now)

Here is AL's U-4923 semi tractor

Obviously Tata design by dint of Daewoo is more modern.

 

[Śakra]

They're going to have to lower the suspension otherwise they will be too tall for bangladeshis to see over the steering wheel.


@Nilgiri what do you think?

 

[gslv mk3]

They got the design from Daewoo Truck Division which they bought earlier (definite Korean/JDM truck design).

No, not a Korean design- that was the Novus. It's actually Italian cab design.

AL's HCV truck offerings are not that spectacular or modern compared to Tata's. Maybe one of the Indian Auto experts can comment.....

But India is no Japan (not even China or even Thailand). Just take a look at AL plant for MCV's in Hosur, Karnataka below. This is no plant with KAIZEN or JIT principles. Its just underpaid under-trained guys screwing together parts.

Meanwhile - Dongfeng truck assembly line in Shiyan, Hubei province.....

I knew that China will come up somewhere in your post, But you must realise that you're using pictures of a plant set up in the 1990s. Here is a view of their largest plant.

http://www.ashokleyland.com/node/1921#
A news article about the new plant- http://www.businesstoday.in/magazine/features/skilling-the-unskilled/story/5701.html