Commercial vehicle maker Ashok Leyland has initiated an organisational rejig to create three divisions — one each for trucks, buses and power solutions.
Historically, Ashok Leyland’s corporate structure has been organised functionally, in terms of human resources, marketing, finance and sales.
This restructuring will help migrate the company to a matrix organisation (pooling people for projects based on similar skills), said Vinod K. Dasari, Managing Director, at the company’s annual results conference recently. Each division will have an independent global head. The revamp will help the company be customer-centric and enhance shareholder value, said Dasari.
It will also help align the company towards its mission to be among the world’s top 10 truck-makers and top five bus-makers. Employees have been apprised of this proposed move.
The move comes at a time when the commercial vehicle industry is going through a major slump. Ashok Leyland has reported a 23 per cent drop in net profit for the financial year at Rs 433 crore. Total income decreased 3.3 per cent to Rs 12,481 crore. Sales of medium and heavy commercial vehicles, especially, have dropped. Only the light commercial vehicle Dost has bucked the trend with steady sales.
Last year, Ashok Leyland shifted to a five-day working week, in line with market demand. Dasari hopes the market turns around quickly so that the company can move back to a six-day week soon.
Market conditions have also forced the company to scale down its capital expenditure for this year (2013-14). This year, Ashok Leyland has planned a capex of Rs 600 crore, substantially lower than the Rs 1,000 crore it invested last year.