The Fiat Group is reportedly in advanced talks with several major international commercial vehicle manufacturers to sell its 15 percent holding in India's bus and truck maker Ashok Leyland Ltd, which is a key part of the Hinduja Group, local media sources report. Iveco has held a minority stake in Ashok Leyland for almost two decades, and although the Indian firm turns in consistent profits it is not part of Iveco's forward-looking strategy. Several major rivals of Iveco are reported to be interested including Swedish giants Volvo and Scania.

Ashhok Leyland last month reported its full-year financial figures which saw the company posting market share gains in every product segment and overall volume growth of 12.6%; and registering a turnover of Rs 60,531.08 million during the 2005-06 period. This is a 25.8% growth over the last fiscal’s turnover of Rs 48,108.01 million. At Rs 3,273.20 million (Rs 2,714.10 million,) net profit rose 20.6%.  The Company has proposed a dividend of 120% for 2005-06 as against 100% in the previous year. At the same time Ashok Leyland's operating margins have improved by 27.7%, to Rs 5,400.70 million (Rs 4,228.50 million). While other income is lower at Rs 329.74 million (Rs 537.55 million,) net financial expenses are higher at Rs 164.53 million (Rs 27.98 million,) for a gross profit of Rs 5,565.91 million (Rs 4,738.07 million,) up 17.5%.

Fiat Auto has been busy overhauling its Indian operations during the last year as it seeks to kick start its stalled car sales in the important emerging nation. It has already mothballed one of its two assembly plants, and has begun selling its passenger car range through Tata Motors with which it last year entered into a wide ranging strategic alliance. Tata Motors, part of the giant Tata Group, is the country's biggest commercial vehicle manufacturer, and last week the Group's Chairman Rata Tata joined the Fiat Group board of directors.

ASHOK LEYLAND

The origin of Ashok Leyland can be traced to the urge for self-reliance, felt by independent India. Pandit Jawaharlal Nehru, India's first Prime Minister persuaded Mr. Raghunandan Saran, an industrialist, to enter automotive manufacture. In 1948, Ashok Motors was set up in what was then Madras, for the assembly of Austin Cars. The Company's commercial destiny and its name changed soon with equity participation by British Leyland and Ashok Leyland commenced manufacture of commercial vehicles in 1950.

Since then Ashok Leyland has been a major presence in India's commercial vehicle industry with a tradition of technological leadership, achieved through tie-ups with international technology leaders and through vigorous in-house R&D. Access to international technology enabled the Company to set a tradition to be first with technology. Be it full air brakes, power steering or rear engine busses, Ashok Leyland pioneered all these concepts.
 

Responding to the operating conditions and practices in the country, the Company made its vehicles strong, over-engineering them with extra metallic muscles. "Designing durable products that make economic sense to the consumer, using appropriate technology", became the design philosophy of the Company, which in turn has moulded consumer attitudes and the brand personality. Ashok Leyland vehicles have built a reputation for reliability and ruggedness. The 375,000 vehicles we have put on the roads have considerably eased the additional pressure placed on road transportation in independent India.  In the populous Indian metros, four out of the five State Transport Undertaking (STU) buses come from Ashok Leyland. Some of them like the double-decker and vestibule buses are unique models from Ashok Leyland, tailor-made for high-density routes.

In 1987, the overseas holding by Land Rover Leyland International Holdings Limited (LRLIH) was taken over by a joint venture between the Hinduja Group, the Non-Resident Indian transnational group and IVECO Fiat SpA, part of the Fiat Group and Europe's leading truck manufacturer. The blueprint prepared for the future reflected the global ambitions of the company, captured in four words: Global Standards, Global Markets. This was at a time when liberalisation and globalisation were not yet in the air. Buoyed by the backing of two international giants, Ashok Leyland embarked on a major product and process upgradation to match world-class standards of technology.

In the journey towards global standards of quality, Ashok Leyland reached a major milestone in 1993 when it became the first in India's automobile history to win the ISO 9002 certification. The more comprehensive ISO 9001 certification came in 1994 and ISO 14001 certification for all vehicle manufacturing units in 2002. The year 1994 was also the year, when international technology changed the way India perceived trucks. A new breed of world-class trucks - technologically superior and eco-friendly - rolled out on Indian roads from our state-of-the-art manufacturing plant at Hosur, near Bangalore. 'Cargo' brought with it, a new set of values and unmatched benefits, ushering in a revolution.

Today eight out of ten metro state transport buses in India are from Ashok Leyland. At 70 million passengers a day, Ashok Leyland buses carry more people than the entire Indian rail network. From 18 seater to 82 seater double decker buses, from 7.5 tonne to 49 tonne in haulage vehicles, from numerous special application vehicles to diesel engines for industrial, marine and genset applications, Ashok Leyland offers a wide range of products. Among new vehicles scheduled for launch in the current year are a 49T high power tractor and a 31T high power 8x4 tipper – both from the Newgen range – and branded buses including the InterCentury Luxura. Introduction of ABS system on trucks is also on the cards. The Company has already commenced development work on Euro IV compliant engine. A modern 400-seat design office is close to commissioning, while Research & Development spend during 2005-06 was 1.7% of turnover.