Bangalore Sundaram Motors

Ashok Leyland Ltd.

REPORT ON

BANGALORE SUNDARAM MOTORS ICV SALES DIVISION

Submitted by:

Abhishek Dubey Sr. Manager - Marketing- Ashok Leyland ICV Sales

Vibhu Gangal Summer Intern- MDI Gurgaon ICV Sales

Ashok Leyland Ltd.

Objective: The main focus of the visit to Bangalore Sundaram Motors is to find out the following 1. SBU Effectiveness 2. Organizational Structure of the SBU 3. Marketing Strategies adopted by the SBU to boost the sales of ICV 4. Workforce employed by the SBU and their effectiveness 5. (if Possible) Observe the P&L and Balance sheet of the SBU to study the working of the organization 6. Study the effectiveness of the current training program given to the Dealer Sales Executives (DSEs) 7. Find out the competition strategies

Meeting with Mr. Anantha Padmanabha, Head ICV Sales Division, Sundaram Motors, dated 8th April, 09 He gave a brief introduction of Sundaram Motors and the collaboration of Ashok Leyland with Sundaram Motors. There are 10 branches of Sundaram motors in Karnataka. The organizational structure according to him is like this-

Ashok Leyland Ltd.

Characteristics of Bangalore ICV Sales department are1. Separate department of the Sundaram Motors but not the SBU. The Profit & loss and Balance Sheet are still accounted within the Sundaram Motors audit. Also the Decision of the sales target and market share target is formulated at the regional level together by Mr. Anantha and Mr. Ravi Kumar. They also take the inputs from the Regional AL office for the target settings. Currently the TIV of Karnataka is 2889 and the Expected TIV is 4000 in the current financial year. The Market Share of AL in Karnataka is 1.83% in financial year 2008-09 and the target MS is 8%. 2. There is no service engineer for the ICV division as such in ICV Division. 3. The Workshops or the service Bays for the ICV vehicles are not separate as of now. However there can be a possibility of allotting separate Bays in case the MS of ICV increases. Currently the Bays for MDVs are handling the ICV vehicle traffic. 4. In financial year 2008-09 the Revenue of the Karnataka Division of ICV is Rs. 5.85 Lacs and the cost of running the business is Rs. 18-20 Lacs. (Cost item includes Inventory of vehicles, Man Power, Rent of the Offices, Telephone, Electricity, Promotional and entertainment expenses, etc.) 5. The main ways to advertise or to promote the ICV is through the Demonstrations, test drives given to customers and the mailers send to them via mail and email.

Ashok Leyland Ltd.

The main reasons behind losing MS and low revenue of ICV, according to Mr. Anantha, are1. Product related Problem- Product do not have a pull in the market. Its resemblance with the Cargo, zero repurchasing price, only 1 co-driver seat, less availability of the spare parts, and designing problems (like alignment of driver seat and the driving wheel is not proper, breaking efficiency is very low) are few problems which was quoted by Mr. Anantha. Some other problems that were quoted during the visit by other people were the wiper and the driver seat position problem. 2. Word of mouth or network advertising is zero because of customers’ dissatisfaction from the ICVs. 3. The financing problem- though the AL has collaboration with 3 National Banks but still customer faces difficulty getting the vehicle financed by the banks. Even the Sundaram finance prefers competitors’ vehicle for giving loans. This is all attributed to the few defaults which happened because the customers were not getting the required return from the vehicle which is why they defaulted 4. Spare parts problem was expressed by Mr. Anantha with much greater concern. Reason being the minor parts of the ICV vehicles were not available at the workshop. Thus the service quality of the vehicle is not satisfactory. 5. Compared to the competitors the service level is very low. The competitors’ response to the customer problem is much quicker than ours. The promotion handout of the competitors is much more attractive and well designed in case of the competitors than ours. 6. The 24X7 mobile service van facilities are not functional in Bangalore region as of now. Talking to Mr. Srinivasan, Manager Service, Peeniya, Bangalore, we came to know that this 24X7 van is functional till evening and in the night the critical and very important cases are handled only. 7. Motivational Practices for the DSEs followed by AL is not too aggressive. 8. Finished goods stock is another problem was also quoted by Mr. Arun (AL – SE in Bangalore). Example of a contract of 11 buses sale which is still pending because of the inability of AL to provide required number of buses in time. 9. Ordered MSL from dealer side is not supplied from the AL side. This problem was frequently quoted by the Work station managers in Bangalore. The MSL level is specified by AL but the ordered MSL is still pending from the manufacturing plant. These ordered items, as quoted by Mr. Srinivasan, are

Ashok Leyland Ltd. small parts. A few cases were also quoted in which the supplied parts were faulty and had to be altered in order to fit in the ICVs. 10.The Parts are not properly numbered and the part book is not updated regularly. These problems were told by Mr. Murlidharan, DGMServices. He said that the competitors have a much better electronic Parts catalogue which is facilitated by the pictorial representation with proper dimensions and chassis number on it. He also said that the “first Peek Availability” of AL is very low. 11.Interaction with Mr. Arun highlighted a few more points- usage of the Ecomet in Cement Loading has some problem as the longitudinal arrangement (which is done through automated Machines) leaves some space and the full usage of the loading space is not achieved. Also the aesthetics and the outer appearance of Ecomet need a instant change. 12.Low Media Promotions.

Few suggestions that were given 1. AL should start the parts buyback option which will encourage the workshop dealers to maintain a better level of parts and product inventory 2. The parts supply from the AL should be properly numbered and chassis number has to be clearly identified. 3. AMC to be projected to the key customers and corporate sales. 4. Training Program more of a technical nature.

Mr. Arun on Parallel SBU for ICV sales and services in Bangalore (Karnataka) 1. There will be no third party intervention in customers and the AL. 2. Under direct control of AL-SE, this brings in more accountability of the SE. 3. Better projection of sales. 4. Will require initial support from AL but will work in Bangalore and will make the dealer to concentrate on ICV more.

Ashok Leyland Ltd.

Persons Interviewed 1. Mr. M. N. Ravi Kumar, Head – CV Karnataka 2. Mr. Anantha Padmanabha, Sr. Manager – Marketing 3. Mr. R Srinivasan, Manager – Services 4. Mr. S. J. Murlidhar, DGM – Services 5. Mr. Arun, Sales Executive – AL – ICV 6. Mr.Sunil, Sales Executive – AL – ICV