The production facility will be located at Virali Malai in Madurai where an existing TVS Coaches plant will be upgraded. The equity share for the project was yet to be finalised, according to him.

Irizar is one of the most important manufacturers of bus-bodies in Europe and TVS Coaches is ALL's most important dealer. Though the manufacture of bus-bodies will be a new venture for Ashok Leyland, the company has been building tipper bodies, tractor-cabins and frontal structures through Automotive Coaches and Components Ltd (ACCL), a joint sector enterprise of ALL and Tidco, Mr Amrolia pointed out.

"This will provide bus-bodies for international vehicles and luxury tourist coaches. It will expose Indian customers to the highest quality foreign products," Mr Amrolia added.

Pointing out that the market was lucrative for bus-bodies, he added that the venture will target both the Indian and foreign market. This will be Irizar's first foray in India. The initial production figures are expected to be in hundreds of units, Mr Amrolia said.

Ashok Leyland, which is one of the leaders in the middle and heavy commercial vehicle category, has improved its market share to around 37 per cent, according to him.

"Our focus is to strengthen our presence in the northern Indian markets," Mr Amrolia said. The company is currently exporting to Sri Lanka, Bangladesh, Nepal, Gulf countries and Mauritius, besides others. Ashok Leyland has also recently exported over 200 middle commercial vehicles to Sri Lanka, said to Mr Amrolia. ALL, which is also is the largest manufacturer of compressed natural gas (CNG) vehicles in the country will be supplying nearly 1,000 CNG buses to Delhi Transport Corporation (DTC) by January this year. Another 400 to 500 buses will be supplied by March 2001.