Ankit Arora_Trailer axle.pdf

T O U N D E R S T A N D T H E B U Y I N G B E H A V I O R

A N D P O S S I B L E W A Y S T O P E N E T R A T E I N

T H E T R A I L E R A X L E B U S I N E S S F O R A S H O K

L E Y L A N D

Industry Guide: Mr. C. Sampath Kumar, Deputy General Manager (Parts/Marketing)

Submitted in partial fulfillment of the Post Graduate Programme in Management at

TAPMI, Manipal by:

Name: Ankit Arora

Roll No: 14S705

Batch: 2014-16

Date: 27th May, 2015

M I P S U M M E R P R O J E C T R E P O R T

T A P M I , M A N I P A L , K A R N A T A K A - 5 7 6 1 0 4

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ACKNOWLEDGMENTS

It is definitely not possible to prepare a project report without the guidance & encouragement from a few people. This one is certainly no exception.

I would like to thank all the personages who have helped me in this project. Without their active guidance, help, cooperation & encouragement, I would not have made headway in the project.

I am ineffably indebted to Mr. C. Sampath Kumar (Deputy General Manager - Market planning for commercial and Technical) for conscientious guidance and encouragement to accomplish this assignment.

I am extremely thankful and pay my gratitude to Mr. Sreeji J.S (Divisional Manager - Market planning, spare parts) & Mr. Thamaraikannan (Deputy Manager, Parts) for their valuable guidance and support on completion of this project.

I am also thankful to the entire staff of Ashok Leyland for their insights which helped me in making key decisions for my project.

I extend my gratitude to T.A Pai Management Institute for giving me this opportunity.

Pen ultimately I would like to thank my parents and member of my family, who has always supported me morally as well as economically.

Last but not least gratitude goes to all of my colleagues who directly or indirectly helped me to complete this project report.

Thanking You,

Ankit Arora

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EXECUTIVE SUMMARY

TO UNDERSTAND THE BUYING BEHAVIOR AND POSSIBLE WAYS TO PENETRATE IN THE TRAILER AXLE BUSINESS FOR

ASHOK LEYLAND

ASHOK LEYLAND

Ankit Arora

26th May, 2015

This Project is commissioned to augment sales of Ashok Leylands trailer axle with

specific focus on growth volumes in retail.

This Project was an exploratory research and was completed by collecting data

through secondary data, like leaflets of competitors and in-depth interviews from

customers related to trailer axle i.e. mechanics, fleet operators, truck drivers & trailer

manufacturers. In-depth interviews were conducted in Chennai, Vijayawada &

Bengaluru market with Mechanics, Truck Drivers, Fleet owners and Trailer

manufacturer. Quality, maintenance, dealer Network, spare parts availability, brand

value, & after sales support were the factors identified by studying and analyzing the

secondary data. Factors like Credit Policy, Price, Promotional offers, and delivery time

were the factors added to the list after in-depth interviews.

Chennai & Bangalore market is mostly organized, whereas Vijayawada market is

totally unorganized. In Vijayawada market, customers purchase Ashok Leyland axle

but from disposable market.

The main customers who purchase trailer axles are trailer manufacturers in Chennai

and Bengaluru and Fleet operators in Vijayawada. Price, Quality and maintenance are

the main buying behavior factors for the customer.

Websites, Direct sales executives and magazines are the medium mostly preferred by

the customers to know more about the trailer axle market. York & Fuwa were the

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dominant players in Chennai and Bengaluru. Customers preferred them due to the low

price, high quality, very low maintenance, and excellent after sales support.

The result of this project is limited only to the three markets mentioned above.

On the basis of the above findings, it is recommended that

Ashok Leyland must work on its product and try to match the qualitative offering of

York and Fuwa.

Improve customer support.

Provide customized leaf spring seat.

In order to promote its product, Trailer axle needs to be displayed online along with

its technical specifications.

Ashok Leyland should tie-up with new trailer manufacturers.

Open a refurbished store to compete in the disposable market.

Introduce its sub-assembly offerings to trailer axle manufacturers producing in-

house.

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LIST OF FIGURES

Figure 1-Structure of Ashok Leyland Marketing department ........................... 1

Figure 2 - Trailer axle ...................................................................................... 2

Figure 3 - truck with triple axle trailer ............................................................... 3

Figure 4 - Research Methodology ................................................................... 7

Figure 5 - Leaflets of competitors .................................................................... 8

Figure 6 - no. of trailers produced .................................................................. 14

Figure 7 - Vijayawada disposable market ...................................................... 15

Figure 8 - No. of trailers produced by Satrac per month ................................ 16

Figure 9 - No. of trailers produced by T&T pvt ltd ......................................... 17

Figure 10 - Flow chart of tying up with trailer manufacturer ........................... 23

Figure 11 - Business model of tying up with trailer manufacturer .................. 24

Figure 12 - Leaf Spring seat .......................................................................... 25

Figure 13 - Logo for a refurbished store ........................................................ 25

Figure 14 - Business model for a refurbished store ....................................... 26

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LIST OF TABLES

Table 1 - Leaflet comparison of York, Meritor, KKTC and York TATA ........... 11

Table 2- Leaflet comparison of ANG Auto, AAL auto axle, ANG industries,

EICHER ......................................................................................................... 12

Table 3 - In-depth interviews in Chennai ....................................................... 13

Table 4 - SWOT analysis of Ashok Leyland's trailer axle .............................. 21

Table 5 - Competitive comparison with York and Fuwa ................................. 23

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TABLE OF CONTENTS

ACKNOWLEDGMENTS ----------------------------------------------------------------------------------------------------- I

EXECUTIVE SUMMARY --------------------------------------------------------------------------------------------------- II

LIST OF FIGURES ---------------------------------------------------------------------------------------------------------- IV

LIST OF TABLES ------------------------------------------------------------------------------------------------------------- V

1. INTRODUCTION --------------------------------------------------------------------------------------------------------- 1

1.1 ABOUT THE COMPANY ------------------------------------------------------------------------------------------ 1 1.2 ASHOK LEYLAND AFTERMARKET ------------------------------------------------------------------------- 1 1.3 TRAILER AXLE ------------------------------------------------------------------------------------------------------- 2 1.4 THE INDIAN TRAILER MARKET ------------------------------------------------------------------------------ 3 1.5 PRODUCT PORTFOLIO ------------------------------------------------------------------------------------------ 3 1.6 MANAGEMENT DILEMMA --------------------------------------------------------------------------------------- 4 1.7 RESEARCH PROBLEM ------------------------------------------------------------------------------------------- 4

2. RESEARCH OBJECTIVES ------------------------------------------------------------------------------------------ 5

2.1 BENEFITS OF THIS STUDY ------------------------------------------------------------------------------------ 5

3. SCOPE ------------------------------------------------------------------------------------------------------------------------ 6

4. RESEARCH METHODOLOGY ------------------------------------------------------------------------------------- 7

4.1 EXPLORATORY RESEARCH ---------------------------------------------------------------------------------- 7 4.1.1 SECONDARY DATA ----------------------------------------------------------------------------------------- 7 4.1.2 IN-DEPTH INTERVIEWS ---------------------------------------------------------------------------------- 8

4.2 IDENTIFYING THE TARGET CUSTOMER ---------------------------------------------------------------- 8 4.3 DATA COLLECTION ----------------------------------------------------------------------------------------------- 9 4.4 DATA ANALYSIS----------------------------------------------------------------------------------------------------- 9

5. DATA COLLECTION -------------------------------------------------------------------------------------------------- 10

5.1 STUDY ON SECONDARY DATA ----------------------------------------------------------------------------- 10 5.2 COLLECTING PRIMARY DATA ------------------------------------------------------------------------------- 13

5.2.1 CHENNAI MARKET ----------------------------------------------------------------------------------------- 13 5.2.2 VIJAYAWADA MARKET ----------------------------------------------------------------------------------- 15 5.2.3 BENGALURU MARKET ----------------------------------------------------------------------------------- 16

7. KEY FINDINGS & ANALYSIS ------------------------------------------------------------------------------------- 19

6.1 OTHER FINDINGS ------------------------------------------------------------------------------------------------- 20 6.2 SWOT ANALYSIS -------------------------------------------------------------------------------------------------- 21

8. RECOMMENDATIONS ----------------------------------------------------------------------------------------------- 22

9. LIMITATIONS ------------------------------------------------------------------------------------------------------------- 28

10. CONCLUSION ---------------------------------------------------------------------------------------------------------- 28

11. APPENDIX ---------------------------------------------------------------------------------------------------------------- 29

REFERENCES ---------------------------------------------------------------------------------------------------------------- 33

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1. INTRODUCTION

1.1 ABOUT THE COMPANY

Ashok Leyland is a commercial vehicle company founded in the year 1948. It is

currently the 2nd largest manufacturer of commercial vehicles in India, 4th largest

manufacturer of buses in the world and stands 16th in terms of trucks globally.

Headquartered in Chennai, India, It has a global presence in 50 countries. It is used

by over 70 million passengers to get to their destinations every day while 700,000

trucks keep the economy moving.

Ashok Leyland is jointly ventured with Nissan Motors for LCV, John Deere for

construction equipment, and Continental AG for automotive infotronics, and Alteams

group for high press die casting aluminum components for the telecommunication and

automotive sector.

1.2 ASHOK LEYLAND AFTERMARKET

Figure 1-Structure of Ashok Leyland Marketing department

Ashok Leyland

Marketing

Bus Aftermarket

Service Products

Service PartsNetwork

Development

TrucksPower

Solutions Business

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Ashok Leyland is split into four verticals, Bus, Trucks, Power Solution business &

Aftermarket. The Aftermarket division complements the Bus, Truck and Power Solution

division and vice-versa. The main purpose of Aftermarket division is to enhance

customer satisfaction index.

The Aftermarket division consists of three divisions, Parts, Service, & Service products.

The Parts and Service products generate direct revenues to the company.

The Service products division consists of reconditioned engines, extended warranty

policy, extended service policy, annual maintenance contract, insurance, driver

training institute & service training institute.

The service division is split into field service and technical service. The technical

service ensures reliability of the vehicle, provides service manual, product manual etc.

The Parts division consists of two divisions, Leyparts & Valueparts. These two verticals

serve four categories of customers i.e. Replacement, Institutional, Industrial &

Defence.

The Replacement division consists of captive and the retail market. The Captive

market contains Authorized Service centers, Dealers etc. whereas the Retail market

deals with Retailers, Ashok Leyland Retail Parts Store (ALRPS). The Institutional

market is meant by the State Transport units.

1.3 TRAILER AXLE

An axle is a central shaft for rotating wheel or gear and a trailer in simple words is an

unpowered vehicle carried by a powered vehicle. This unpowered vehicle is meant to

Figure 2 - Trailer axle

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carry loads ranging from small to heavy. Hence a trailer axle is used to guide trailers

to carry loads.

1.4 THE INDIAN TRAILER MARKET

With a market size between 18,000 to 20,000 units per annum, The Indian trailer

market is expected to grow at a rate of 10-15% annually till 2020. It is highly

unorganized and fragmented in nature with a large numbers of smaller players

accounting for over 80% of the production. The organized sector has a handful of trailer

manufacturers, fighting hard to gain acceptance for higher quality trailers. Customers

order for a trailer before buying a vehicle because it takes time for a trailer to be

produced.

Also, many global companies who entered the Indian market recently, like Wal-Mart,

Tesco and IKEA, are bound to replicate their contemporary logistics model followed in

other countries and this is likely to spell good news for the organized sector. The

smaller players would not be able to meet the quality norms and other stringent

demands of these companies. In-order to build quality trailers, quality trailer axles are

required for the businesses to function smoothly.

1.5 PRODUCT PORTFOLIO

Ashok Leyland currently supplies trailer axle with a track length of 1816mm & 1840mm.

This trailer axle is used to carry loads such as cement, steel, market load, container

Figure 3 - truck with triple axle trailer

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etc. The current flow of Ashok Leylands trailer axle is Ashok Leyland Dealer

Retailer/Customer.

1.6 MANAGEMENT DILEMMA

To identify the reasons for dip in sales of trailer axles of Ashok Leyland and ways to

sustain in the market?

1.7 RESEARCH PROBLEM

To understand the buying behavior of the customers while purchasing trailer axle and

finding out possible ways to penetrate in the market.

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2. RESEARCH OBJECTIVES

The Objectives are derived from the Research problem and are divided into four part

I. To study the current business of organized & unorganized sector of Trailer Axle

manufacturers.

II. To find out the market share of organized & unorganized Aggregate Suppliers.

III. To list out the factors that trigger the buying behaviour of trailer axle

IV. To identify a niche market, if any.

2.1 BENEFITS OF THIS STUDY

Determining the competitors and what are the actions they take to sell their product.

How does the market function and identify the potential buyers in each market.

What are the parameters which influence the buying behaviour of a customer?

Where does Ashok Leyland stand among the customers and its competitors?

To help Ashok Leyland target a niche segment as per their needs.

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3. SCOPE

This Study concerns Trailer Axle market, hence the scope of the project is limited to

customers related to trailer axle i.e. truck drivers, mechanics, fleet operators, and trailer

manufacturers. This Scope is restricted to three markets, Chennai, Vijayawada and

Bengaluru.

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4. RESEARCH METHODOLOGY

4.1 EXPLORATORY RESEARCH

The research carried out in this project was exploratory research. It is one of the most

widely used research methodology. It is a loosely structured design. The basic purpose

is to understand the problem situation and explore it. Exploratory research focusses

mainly on Qualitative data. The answers to the objectives were achieved through in-

depth interviews and referring to secondary data.

Figure 4 - Research Methodology

To collect information, the type of sampling method used was Judgmental Sampling.

This type of sampling can be defined as identifying the samples who would provide

quality information based on judgement of the expert in this field.

4.1.1 SECONDARY DATA

To gain some information on the subject, few leaflets & Brochures of various

competitors were studied. This would give us an idea regarding the various competitors

and their Unique selling propositions (USPs). This study helped in identifying a few

parameters which could influence buying behavior.

Exploratory Research

Seconday Data

In-Depth Interviews

Identifying the Target customers

Data Collection

Data Analysis

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4.1.2 IN-DEPTH INTERVIEWS

To understand the market and the category of people who use trailer axle in day-to-

day activities, in-depth interviews were conducted. The in-depth interviews were

divided into 3 phases.

1. Chennai

a. Truck Drivers

b. Mechanics

c. Fleet owners

d. Trailer manufacturers

2. Vijayawada

3. Bengaluru

In Chennai, 15 Truck Drivers, 6 Mechanics, 4Fleet operators and 2 Trailer

manufacturers were interviewed. The questions were separate for each category and

were focused on the objectives and some general questions in order to engage the

person.

4.2 IDENTIFYING THE TARGET CUSTOMER

After acquiring rich data from Chennai market, the target category of customers were

identified. Specific customers were targeted based on judgmental sampling and certain

Figure 5 - Leaflets of competitors

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questions were tweaked based on the inputs in order to receive results based output

from Vijayawada and Bengaluru market.

4.3 DATA COLLECTION

Data was collected through in-depth interviews.

4.4 DATA ANALYSIS

The inputs provided by the target customers were then noted down. These inputs

helped in comparing Ashok Leylands trailer axle with its competitors. Customer

perception regarding trailer axle was found out and parameter while purchasing a new

axle were ranked. Based on the analyzed data, recommendations were provided.

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5. DATA COLLECTION

5.1 STUDY ON SECONDARY DATA

The following table shows the competitor comparison using various leaflets. The USPs mentioned in the leaflet of each brand were noted and plotted against each other based on the common parameters identified.

Parameter York II Meritor KKTC York TATA

Strength MIG welding between Spindle and

hollow beam ensures

the axle is strong.

Induction hardened spindle for tough

Indian terrain.

Fabricated housings with optimum

thickness to

withstand abuse and

neglect.

Spindle and Beam together as a single

piece and No

welding is done.

Brake Journals are properly hardened

and one piece design

makes it fatigue

proof and long life.

150x165 rectangular beam is the

strongest section, it

reduces deflection

during over loading

and bad rod

condition.

Solid spindle provides extra

strength to the axle

and causes less

deflection during

overloading hence

increasing axle life.

Wear resistance Induction hardened bearing journal are

more wear resistant

and give high Tyre

life

tyre life Case hardened bearings on solid

spindle

In built technical details for very good

life.

Less deflection of axle beam leads to

increased tyre life.

Increase in contact of brake drum and

brake liners

increases the tyre

life.

The solid spindle causes less

deflection during

overloading leading

to better tyre life.

Induction hardened bearing journal

allows spindle not to

wear out hence

increasing tyre life.

Better load sharing between bearings

increases tyre life.

Single spindle nut

and stronger split pin

locking system is

easy to fit leads to

increased tyre life.

Low maintenance Fully enclosed cam shaft. High

performance grease

along with superior

quality hub seal

Special lithium grease feasible upto

150,000kms and

check nut hub setting

program

High quality of grease used and it is

required after 1 lac

kms and the hub seal

has a long life too

Hub Greasing can be done through a

grease nipple saving

maintenance time

and cost and

increase bearing life.

Single spindle nut and stronger split pin

locking system is

easy to fit

Coarse threaded wheel bolts avoids

dust and damages

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Parameter York II Meritor KKTC York TATA

Stud life Design gives maximum support to

wheel studs and

brake drum

avoiding frequent tightening of wheel nut

Fine thread studs

mechanism Design uses simple mechanism

Single spindle nut and stronger split pin

locking system is

easy to fit

Brakeing and Brake liner life and brake drum life.

Cam shaft positioning of 22.50.

2 Circlips controls

camshaft play

Brake spiders are machined after

welding on axle

beam means better

brakeing

Better contact between brake liners

and brake drum

Better brake performance and fast

release of brake

shoe, this

performance leads to

increase in brake

liner and brake drum

life.

Use of circlip to control camshaft play

increases the contact

between drum and

liner hence increase

life of brake drum

components.

Brake drum life is increased due to

better contact

between brake liner

and brake drum.

3 different Mounting

locations for brake

chambers.

Extra features Premium quality range of trailer axles

produced to meet

OEM specifications

by Meritor covering

all major Indian

trailer apps.

Anti-corrosive paint for longer life.

Wide range of brakes to suit each and

every vehicle

application.

Market competitive prices with

unmatched

performance and

durability.

Use of O ring outside cam bush increases

the life of the bush by

not allowing dust to

enter.

Comments Focuses directly on the benefits provided

to the customer

Focuses on additional features

and technology used

but does not focus

on the direct benefits

to the customer

Fails to highlight the technical detail for

Tyre life.

Focuses a lot on Tyre life, low

maintenance and

braking system.

Features and

benefits are also

translated in local

languages.

Table 1 - Leaflet comparison of York, Meritor, KKTC and York TATA

Parameter ANG Auto AAL AutoAxle ANG Industries EICHER

Strength Friction welding technology indirectly

points out the

strength.

Square beam with friction welded

spindles for reliability

and unmatched

Heavy duty bearing for higher load.

Single piece hollow

tube square axle

beam.

Strong axle with thick cross section

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Parameter ANG Auto AAL AutoAxle ANG Industries EICHER

Homogenous welding of spindle

without any

inclusion.

Low inherent weight of the axle beam

combined with high

payload capacity.

strength unlike

conventional weld.

Wear resistance Forged, quenched and tempered

spindles with

induction hardened

bearings journals for

optimize wears and

fatigue.

Forged, quenched and tempered

spindles with

induction hardened


long life, precise

bearing location and

longer Tyre life.

tyre life Axle beam is adapted to maximize

tyre life and reduce

wear.

Forged, quenched and tempered

spindles with

induction hardened


long life, precise

bearing location and

longer tyre life.

Low maintenance High performance brake linings for

extended service life.

Thicker material for better fatigue life.

Braking and Brake liner life and brake drum life.

Hardened brake shoe for effective

braking.

S CAM brake for high efficiency.

S-Cam brake with hardened brake

webs for effective

and reliable braking

optimized beam,

engineered for low

dead weight, high

payload capacity &

maximum Tyre life.

Powerful brake system with utmost

safety.

Mechanism Easy to fit assly.

Extra features Long lasting anti corrosive paint

application.

Completely interchangeable with

Indian OEM.

Easily available of spares throughout

India

Built to high engineering standard

& supported by a

nationwide

sales/service/ spare

network.

Easily available in the market due to

interchangeability

with Indian OEMs.

Comments Focuses on convenience,

availability and not

much technical

details mentioned

which benefit the

customer.

Focuses on strong dealer network and

highlights easy

interchangeability.

Provides a 15yr warranty for axle

beam and 1yr/5000

kms for other parts.

Provides a brief about the importance

of company's

resources along with

benefits and features

Mentions about how their product is safe

highlighted key

benefits as well as

in-depth benefits.

Mentions about the widespread dealer

network.

Highlights the service department

of eicher including

widespread reach

and facilities

provided for service.

Table 2- Leaflet comparison of ANG Auto, AAL auto axle, ANG industries, EICHER

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5.2 COLLECTING PRIMARY DATA

5.2.1 CHENNAI MARKET

For conducting In-Depth interviews, based on convenience, Chennai market was studied first and areas like Poonamalee and Royapuram

were chosen as these were the areas with decent number of all the four categories of potential customers.

The following table shows the relevant data collected.

Phase I

Sampling Frame -

Truck Drivers

Location - Poonamalee INPUTS RECEIVED

Repairs are undertaken by mechanics.

Greasing is done around 30,000kms.

No problems with trailer axle.

Phase II

Sampling frame

Mechanics

Location Poonamalee,

Royapuram &

Thiruvottiyur

Awareness on AL axles at different areas were

different.

Meritor and second-hand market were giving a

tough competition.

AL Spare parts of trailer axle were available

easily.

Phase III

Sampling Frame

Fleet operators

Location Royapuram

Low cost, Parts availability, and brand value

were the major factors.

GangaMatha and SaiBaba were the most

preferred trailer manufacturers.

Preference was given to second hand market in

terms of repairs.

Table 3 - In-depth interviews in Chennai

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5.2.1.1 INTERVIEWS WITH TRAILER MANUFACTURER

The main trailer manufacturers of Chennai i.e. GangaMatha Trailers & SaiBaba

Fabrication were interviewed,

Figure 6 - no. of trailers produced

Key Highlights of these interviews were

York and Fuwa Axles were preferred.

Customers purchase trailer axles based on Quality, Price, Credit Policy, Spare

parts availability, Delivery time and low maintenance

They prefer one-to-one interaction with the sales team while purchasing axles.

Warranty of 1lakh km and 1yr was provided.

Leaf spring seats are received separately from the trailer manufacturers, as the

seat distance varies accordingly.

Once these interviews were complete, the questionnaire was slightly tweaked and

finalized to understand Vijayawada and Bengaluru market better.

100%

SaiBabaNo. of trailer produced = 6

York

50%50%

GangaMathaNo of trailer produced

=20

York Fuwa

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5.2.2 VIJAYAWADA MARKET

The trailer market in Vijayawada is located in Autonagar. It is completely unorganized.

There is a disposable (second-hand) market located in the heart of Autonagar.

Vijayawada market is completely opposite to Chennai market. Here the fleet owner

purchases trailer axles and not the trailer manufacturer. Disposable market was also

visited, in order to understand the customer needs and the price range paid for a trailer

axle.

The Key Highlights of Vijayawada Market are:

Customers purchase trailer axles only through disposable market.

Ashok Leyland and Railway axles are preferred.

42 nos of trailer axles were sold in last 2yrs.

There is no fixed price in disposable market, the whole market works on bargaining.

Customers do not spend more than 35,000 on a trailer axle as they get good quality

for low price in disposable market.

No initiative was taken by the dealer to improve the sales of trailer axles.



Figure 7 - Vijayawada disposable market

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5.2.3 BENGALURU MARKET

Bengaluru is an organized monopolistic market with 2-3 players. Bengaluru has 2 of

the major trailer manufacturers. The trailer manufacturers tie up with companies

producing axles.2 main trailer manufacturers were visited.

1) SATRAC ENGINEERING PVT LTD

Satrac produces 100 to 120 trailers per month. To produce these trailers, 80-85 units

of Fuwa axles were used, and the remaining axles used were York and BPW. Based

on the rankings of the parameters, Quality, Price, Maintenance, after sales support

and Brand value were the main parameters for selecting a trailer axle. Here, the trailer

manufacturer purchases from 2-3 dedicated suppliers. Currently York, Fuwa & BPW

are the major suppliers for SATRAC Engineering pvt Ltd.

The Key Highlights from SATRAC were,

The axle length provided by York and Fuwa are 1840 and 1850mm respectively.

Warranty provided by these suppliers is 1yr.

Fuwa is received from Pune and York from North India.

Figure 8 - No. of trailers produced by Satrac per month

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Estimated cost of a trailer is 52000 including transportation cost.

Credit policy of 2-3months is provided by the supplier.

Credit of 1 month is provided by SATRAC to large parties only.

York and Fuwa are rated high on Quality, Low Maintenance, Price, after sales

support, Spare parts availability etc.

Information regarding new suppliers is received through websites, magazines and

direct sales executives.

Orders from suppliers are received one month in advance.

Ashok Leyland is located 5kms from SATRAC engineering.



2) TIPPER AND TRAILER INDIA PVT LTD.

Tipper & Trailer India pvt Ltd is located in the outskirts of Bengaluru. Tipper and

Trailer India pvt ltd produces 30-40 trailers per month. 75% of its trailer axles are

Figure 9 - No. of trailers produced by T&T pvt ltd

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manufactured in-house. The axle length of these axles are 2700mm. As Ashok

Leyland does not produce that length. Hence is it out of scope. And hence 25% of

the trailer axles are the scope. The Key Highlights of Tipper & Trailer India (T&T)

are

Warranty provided by York is 1yr.

Estimated cost of a trailer axle is Rs 50,000-60,000.

York is supplying its axles from past 5-6 years.

Have not purchased axle with wheel disc till date.

Quality, Price and maintenance are the major parameters while choosing for a

new axle supplier.

T&T Receives a credit policy of 30days from its supplier.

T&T Does not sell trailers on credit.

Sales Executives, through distributor and websites are the preferred means of

knowing a new product.



For in-house production of trailer axles, brakes are purchased from TVS brakes ltd,

& Bearings from NDT bearings and Timken bearings.

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7. KEY FINDINGS & ANALYSIS

From Table 1 & Table 2, common parameters were identified. Parameters like

Strength, braking and brake life, low maintenance, extra features were identified.

Strength, braking & brake life leads to Quality as a factor, whereas low maintenance

leads to Maintenance. The extra benefits parameter reveals factors like dealer

network, brand value, spare parts and after sales support.

Based on the Data collected from in-depth interviews, it can be inferred that York &

Fuwa are the major competitors in the organized market and Disposable market is the

major threat in the unorganized market.

The factors which were identified are listed below with a brief description for each,

1. Price: - Price is the most important factor in Vijayawada market. It is one of the top

three parameters for Bengaluru market and Chennai market. Customers in

Vijayawada spend upto Rs.35, 000 for an axle from disposable market, whereas

customers in Bengaluru spend around Rs.52, 000 for a new axle.

2. Quality: - Quality is the most important factor for all the three markets, customers

are happy with a decent quality in Vijayawada market, whereas Bengaluru market

& Chennai market define quality in terms of axle tube strength, durability.

3. Low maintenance: - Low maintenance is one of the top 3 parameters for a

customer to choose, low maintenance refers to no Greasing upto 1lakh km/ 1yr,

improved Tyre life, etc.

4. Brand Value: - Customers in Vijayawada region prefer only Ashok Leyland, this is

due to the image created by its vehicles. Bengaluru market does not focus a lot of

brand and believes that Brand value improves with the quality and price.

5. Dealer Network: - Chennai market receives its axles from a location nearby and

so does Vijayawada market. Bengaluru market receives axles directly from the

manufacturer leading to lesser cost and the order is placed once in a month.

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6. Delivery time: - Customers in Chennai & Vijayawada receive orders in a day and

Bengaluru receives once in a month.

7. Spare parts availability: - Customers purchasing York and Fuwa have rarely

received any customer complaints from the past 5-6 years. This shows the quality

of axles being provided. And the spare parts of these axles are easily available at

any retailer handling trailer axles.

8. After sales support: - Any problem arising with the trailer axle is handled by the

customer support staff of the trailer axle and relations between York, Fuwa and

their trailer manufacturers are very good in these terms.

9. Promotional offers: - York and Fuwa provide a bulk discount.

10. Credit policy: - Ashok Leyland currently sells its goods only on cash, whereas

York and Fuwa provide credit policy of 2 months.

6.1 OTHER FINDINGS

Bengaluru market is an organized market and it browses online and through

various magazines to know about various trailer axles in the market.

Trailer manufacturers also prefer interaction with direct sales executives, as it

improves transparency.

There is definitely a scope to compete in Bengaluru market, but Ashok Leyland

needs to match its offerings with its competitors.

Ashok Leyland can compete with 100% of the trailer axles of SATRAC and 25% of

the trailer axles of T&T, as the rest 75% of the axles are made in-house of 2700mm

track length.

Trailer manufacturers at Bengaluru have never purchased axles with wheel disc.

In unorganized market, i.e. in Vijayawada, Sales of new trailer axles are very low.

(42 nos in last 2yrs)

Ashok Leyland is preferred in this disposable market.

P a g e | 21

6.2 SWOT ANALYSIS

Based on the above findings & analysis, A SWOT analysis on Ashok Leylands axle

was done, this is would be helpful in identifying the key internal and external factors

seen as important to achieve the objectives.

STRENGTHS WEAKNESSES

Perceived as a strong axle in

Vijayawada.

522 outlets including 1S, 2S, 3S,

AL office, Sales, & Service.

Well-known brand throughout

the country.

*1S- Spares

2S- Spares & Service

3S- Spares, Service & Sales

Lack of Promotions

High Cost of axle

Unavailability of trailer axles at

dealer end

Limited varieties

OPPORTUNITIES THREATS

Open refurbished Stores

Tie-up with new trailer

manufacturers

niche segment to offer sub-

assembled parts

offering Axle with wheel Disc

Disposable market

Strong presence of York and

Fuwa in organized market.

Attractive pricing of York and

Fuwa.

Table 4 - SWOT analysis of Ashok Leyland's trailer axle

P a g e | 22

8. RECOMMENDATIONS

1. TIE-UP WITH TRAILER MANUFACTURERS:-

It would be difficult for Ashok Leyland to compete in an organized market, as these

trailer manufacturers are having a strong bond with the axle manufacturer. The

following table also shows Ashok Leylands shortcomings compared to its competitors.

Parameter York Ashok Leyland Fuwa

Price Approx. 52k (FOB

Shipping)

Approx. 67k. Approx. 52k (FOB

Shipping)

Quality No Greasing upto

1Lac kms

No Greasing upto

48K kms.

No Greasing upto

1Lac kms

Warranty 1yr (No problems

upto 5-6 yrs.)

6months 1yr (No problems

upto 5-6 yrs.)

After Sales

support

Very good Good Very good

Dealer

network

Very good

(Chennai)

Good (Bangalore)

Very Good

(Chennai)

Very Good

(Bangalore)

Good (Chennai)

Poor (Bangalore)

Credit

Policy

Yes (30 to 60 Days) No Yes

Promotional

Offers

Bulk Discount No Bulk Discount

Delivery

time

1 Day (Chennai)

1 Month

(Bangalore)

1 Day

(Chennai)(Assum

ption)

1 Day (Bangalore)

1 Day (Chennai)

1 Month

(Bangalore)

P a g e | 23

Spare parts

availability

Yes ( Vast

Network)

Yes (Vast

Network)

Yes ( 28 dealers

covering 8 states)

Table 5 - Competitive comparison with York and Fuwa

Also, we know that the sales of trailer axles during the last one year in India is 287

units. For a Dealer, Selling trailer axles is secondary business and for a trailer

manufacturer trailer axle is a primary business. Zero nos sales of Ashok Leyland trailer

axle in the area of SATRAC and T&T (Bengaluru). Hence Ashok Leyland should

develop a new trailer manufacturer where it would recommend its customers to

purchase trailers from them. And this way these trailer manufacturers would purchase

axles from Ashok Leyland.

The Key partners in this business would be Fleet owners, trailer manufacturers, single

vehicles owners and mechanics. In order to improve its presence, it has to continue

maintaining relations with existing trailer manufacturers and find new trailer

manufacturers. It also has to ensure that trailer axles are supplied and received on

time. Selling refurbished axles to trailer axles would provide customers a branded

product with high quality at a comparatively lower price as the dealer profit margin

would be eliminated. The key resources to run this business are IT systems,

manpower, transport facilities and material stock. Customer relations would be

Ashok Leyland Recommends Trailer manufacturer during

every vehicle purchase

Trailer Manufacturer receives order

Trailer Manufacturer orders axles

Increase in sales of trailer axles.

Figure 10 - Flow chart of tying up with trailer manufacturer

P a g e | 24

maintained through maintaining relations with trailer manufacturers by sales

executives. The channel for distribution would be either by ordering online or through

direct sales executives constantly keeping in touch. The key customers are similar to

key partners. The costs involved during this business would be manufacturing costs,

transportation costs and miscellaneous costs. Revenues would be earned through

sales of trailer axles on recommending the trailer manufacturer tied up with Ashok

Leyland, and through sales of spare parts too.

2. PROVIDE AXLE RELATED INFORMATION ON THE WEBSITE :-

Organized market refers to online information while seeking for new axles. Ashok

Leyland has not promoted its axle through any medium. Big trailer manufacturers like

Satrac and T&T pvt ltd refer to websites and magazines to know about new trailer

axles. Hence it is necessary to provide information of trailer axles through Ashok

Leylands website.

Figure 11 - Business model of tying up with trailer manufacturer

P a g e | 25

3. SEPARATE LEAF SPRING SEAT :-

Ashok Leyland currently provides leaf spring seat welded with the axle, the competitors

provide leaf spring seat separately, this is because in case of Ashok Leyland, the leaf

springs comes in contact with the wheel, and hence they are removed and welded

again. Providing separate leaf spring seat would reduce the labor cost of welding.

4. MATCH FUWA AND YORKS QUALITATIVE OFFERING:-

Fuwa and York provide a years warranty. There is no greasing required upto 1lakh

km. customers are happy with the support provided to them. Hence it is necessary to

achieve this level of qualitative offering in order to compete in the market.

5. OFFER TRAILER AXLE WITH WHEEL DISC:-

Currently trailer manufacturers do not purchase trailer axle with wheel disc. Ashok

Leyland provides wheel disc along with trailer axle at a lesser price. Hence it would be

a valuable offering to provide wheel disc.

6. OPEN REFURBISHED STORES :-

Figure 13 - Logo for a refurbished store

Figure 12 - Leaf Spring seat

P a g e | 26

The disposable market is strong in Vijayawada market as customers are purchasing

trailer axles for lesser price. There is a price difference of Rs. 35,000 approximately.

Customers prefer only Ashok Leyland in disposable market. Hence in order to compete

against such a market. Ashok Leyland must open refurbished stores similar to Maruti

True Value and Mahindra First Choice. This would ensure high quality products are

provided at a lesser price.

The above business model would help in running the refurbished business. Here the

key partners would be the Insurance companies who would help us in identifying the

vehicles which could be used by Ashok Leyland for running its refurbished store.

Mechanics, Fleet operators, trailer manufacturers & vehicle owners are our key

partners too. The key activities which the refurbished store has to perform are to

maintain relations with the insurance agents & customer. It also needs to ensure there

is no delay in sales of parts.

Customers would receive a branded part, with good quality and low price. Its main

channel for sales would be through stores. The customer relationship team must

ensure warranty parts are taken care. Also they would ensure after sales service and

extended warranty. The key customers are same as the key partners excluding

Figure 14 - Business model for a refurbished store

P a g e | 27

insurance companies. The revenue streams for these refurbished stores would be

through sales of trailer axles and would be expanded to other refurbished parts too.

7. PROVIDE SUBASSEMBLIES FOR IN-HOUSE PRODUCTION

Tipper & Trailer India ltd. Produces 75% of its trailer axles in-house. They receive

brakes from TVS brakes, Bearings from NDT Bearings and Timken bearings. This

opens up a new scope to supply sub-assembly to such trailer manufacturers who

produce trailer axles in-house. Such trailer manufacturers need to be identified and

then targeted.

P a g e | 28

9. LIMITATIONS

This project results are limited to Chennai, Bengaluru & Vijayawada market only.

10. CONCLUSION

1. The Trailer axle market in Chennai and Vijayawada is highly un-organized, unlike

the Bangalore market which is completely organized.

2. Trailer manufacturers purchase trailer axles in Chennai and Bengaluru, whereas

in Vijayawada, the fleet operators purchase the trailer axle.

3. The trailer manufactured are of 20ft and 40ft length. The axles used are in the

range of 1814mm to 2700mm.

4. The customers value a trailer axle to be strong, durable, reasonable price with low

maintenance & easily available spare parts.

5. Currently the trailers axles are sold to the dealers and the dealer sells to the

customers.

6. Trailer axles in Vijayawada are purchased from the disposable market at a cost of

Rs.30000 Approx. and the new trailer axles are costing around Rs.67000

Approximately.

P a g e | 29

11. APPENDIX

Questionnaire for Trailer Manufacturers

1. Customers name

2. Location

3. Which Brand Dummy Axle do you use?

TATA

Ashok Leyland

Meritor

York

Fuwa

Other____________.

4. How many Trailers do you produce per month and dummy axles are used in

what proportion?

Trailer Produced per

month

TATA

Ashok Leyland

Meritor

York

Fuwa

Others

5. Do you prefer different type/grade axle for different application?

If Yes, Kindly Mention

a)

b)

c)

6. Rank the following parameters based on importance to choose a dummy axle

(1-first, 10-last)

Price

Quality

Maintenance

After sales support

Dealer network

Credit policy

P a g e | 30

Promotional offers

Brand value

Delivery time

Spare parts availability

7. How do you come to know about a new brand / model of Dummy axle?

Website

Direct sales( Brochure/Leaflet)

Through Retailer

Through distributor

Magazines

Word of mouth

8. Which mode of communication do you prefer and why?

Website

Direct sales( Brochure/Leaflet)

Through Retailer

Through distributor

Magazines

Word of mouth

9. What is the warranty provided by your suppliers?

Ashok Leyland

TATA

Meritor

York

Fuwa

Others________________.

10. Rate the following dummy axle based on the following parameters (1-Poor, 5-

Best)

Parameter Ashok

Leyland

TATA York Fuwa Comments

Price

Quality

Maintenance

Spare parts

availability

After sales support

Dealer network

Credit policy

Promotional offers

Brand value

P a g e | 31

Others

____________

10. Who plays a major role in suggesting the type of dummy axle to be used?

Mechanic

Retailer

Wholesaler

Self

Peers

Dummy axle mfg.

11. Do you suggest dummy axle suppliers to your peers/mechanics/retailer

If Yes, then whom and on what basis

12. What is the life of a new dummy axle?

13. What is the cost price of the trailer?

1-1.5 Lac

1.5-2 Lac

2-2.5 Lac

2.5-3 Lac

3-3.5 Lac

3.5-4 Lac

14. What is the cost of wheel disc cost?

15. What is the cost of dummy axle?

16. What is the cost of 5th wheel coupling?

17. Type of brake chamber you use?(Type 20/24)

18. What is the type of slack adjuster you use? ( Auto/ Man)

19. What is your current tax scheme?

20. Will you be ready to buy

a) Dummy axle with wheel disc

b) Dummy axle with Tyre

Questionnaire for fleet operators

1. Customer name

2. Type of business

3. What are the types of trailers used in your business?

4. Do you know about the brand of dummy axle you use?

If Yes, Which brand do you use?

TATA

Ashok Leyland

York

Fuwa

Meritor

Others__________.

5. Rank the following parameters based on which your choice of trailer axle

depends upon?

P a g e | 32

Price

Quality

Maintenance

After sales support

Credit policy

Promotional offers

Brand value

Delivery time

6. Who are your trailer suppliers?

a)

b)

c)

P a g e | 33

REFERENCES

Alibaba. (n.d.). Retrieved from Alibaba: http://www.alibaba.com/product-

detail/Trailer-Axle-axle-for-trailer-or_461024400.html

Ashok Leyland Company overview. (n.d.). Retrieved from Ashok Leyland

Website: http://www.ashokleyland.com/overview

Chawla, D., & Sondhi, N. (2011). Research Methodology: Concepts and

Cases. VIKAS PUBLISHING HOUSE .

MotorIndia. (2015, February 16). Retrieved from Motorindia:

http://www.motorindiaonline.in/applications/krone-to-redefine-indian-trailer-

market-with-satrac-partnership/

Trailer. (2015, february 15). Retrieved from WIKIPEDIA:

http://en.wikipedia.org/wiki/Axle

Documents

Ankit Arora_Trailer axle.pdf