The Hindu Business Line : `Loss of Iveco tech won't impact Ashok Leyland'

In February 2005, Ashok Leyland issued a release stating that Iveco of Italy and the Hinduja Group, which together held 51 per cent stake in it, had entered into a formal agreement for transfer of Iveco technology to Ashok Leyland.

Under the agreement, "Ashok Leyland will have a preferred option for accessing world-class Iveco technology including light, medium and heavy duty trucks as well as buses, special vehicles and powertrain technologies."

The agreement was said to be significant because it gave Ashok Leyland `on-tap' access to commercial vehicle technology.

In interviews to this newspaper subsequently, the Ashok Leyland Managing Director, Mr R. Seshasayee, referred to the knowhow agreement as a key measure in the "technology derisking" of Ashok Leyland.

He had spoken of Iveco as a "very, very intense technology company" and a "technology storehouse that we can open and pick up whatever we want."

Now, Iveco is no longer a partner in LRLIH of the UK, the holding company of Ashok Leyland, and the February 2005 agreement is no longer in force. This would not affect the company, according to Ashok Leyland. (The Hinduja Group recently announced that it was buying out Iveco's stake in LRLIH.)

Mr Seshasayee told Business Line today that the Iveco-Hinduja agreement ceasing to remain in force would have no impact at all, because Ashok Leyland had anyway been sourcing technology from various sources.

Other company officials said that the company anyway had not been getting anything from Iveco. The Cargo range of trucks did not do well in the Indian market and their production had to be discontinued after a few years of launch.

"We are open to technology alliances," said Mr Seshasayee, when asked if the "technology derisking" itself was at risk.

Other officials said that technology agreements are in place for various key components, like with Hino of Japan for engines and ZF for gearboxes.

Besides, with the acquisition of Avia, Ashok Leyland would get access to cab technology for LCVs in the 6-12 tonne range, which is growing fast.

A senior official said that the LCVs of the kind that Avia made were popular in several markets and Ashok Leyland could use the Czech plant as a launchpad for exports.

Meanwhile, the company today told its shareholders that it would put up a bus body plant at Alwar in Rajasthan.

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