Ashok Leyland lines up Rs 1000 crore capex this year, to launch 30 new products


Ashok Leyland, the country’s third biggest truck and bus maker, will spend Rs 1000 crore as capital expenditure, launch 30 products to further improve its performance, a top company executive said.

The Chennai-based company further said that it is aggressively bidding for defense contracts involving mobility needs of the Indian Army, riding alongside its US-based partner Lockheed Martin.

Last year, the company recorded sales of 158,612 units with a growth of 19 percent, which was slightly lower than the industry growth of 20 per cent in commercial vehicle sales.

Sales of medium and heavy trucks for the company jumped 22 percent to 102,826 units as against 84,588 units clocked by the company, as per data provide by the Society of Indian Automobile Manufacturers.

To keep up the momentum, Ashok Leyland managing director Vinod Dasari said: “We will launch about 30 products catering to new applications which will in turn have several hundred variants spread between them”.

The commercial vehicle industry has been on an upswing since the implementation of Goods and Service Tax (GST) last year as it has resulted in greater and faster movement of goods across the states.

As many as 856453 commercial vehicles were sold last year clocking a growth of 20 per cent. This surge in demand has caught manufacturers such as Tata Motors and Ashok Leyland off guard as they have not been able to ramp up production as swiftly.

“The company has been able to hold on to its market share of 34 per cent because of a solid growth in the northern markets which is where we have grown our network,” added Dasari.

From around 31 network points in the first quarter of last year, Ashok Leyland increased it to 187 by end of the year in northern India.

Last year, it won a contract to supply 50 electric buses to be run in Ahmedabad. These buses will be procured and run by a private contractor however there will be no sale and purchase of the buses as the ownership will remain by Ashok Leyland. The supplies of these electric buses will begin later this year.

Ahmedabad is one of 11 cities selected by the center for funding procurement of electric buses under the FAME (Faster Adoption and Manufacturing Electric and Hybrid Vehicles) scheme. While one model is the direct procurement of buses the other model is pay per km where ownership of the bus lies with a private party.

In the light truck space where it has the 2.75 tonne Dost mini truck, the company will address white spaces in the 3.5-7 tonne segment. It has already announced an expenditure of Rs 400 crore towards development of new products in the mini truck space.

Meanwhile, the company further stated that work is progressing as scheduled in building a new truck and bus manufacturing plant in Andhra Pradesh which will witness an investment of Rs 340 crore. The plant will have a capacity to make 9600 buses per year in two phases.moneycontrol