"Our capex for capacity build-up planned at Rs 4,000 crore over three years includes product development and technology upgradation," Ashok Leyland Managing Director R Seshasayee told analysts at a meet in Mumbai.
"The company plans to spend around Rs 1,000 crore in 2007-08, of which we have already spent 35 per cent in first half of this fiscal. The balance will be spent equally over the next two years," Seshasayee said.
The company's capacity as at FY07 stood at 84,000 vehicles per annum. By June 2008, the Ennore facility will add 50,000 vehicles per annum and by September 2009, its Uttarakhand facility is also expected to add 50,000 vehicles per annum. This will take the company's total capacity to 1,84,000 units a year over the next three years, he said.
"The Uttarakhand facility will commence Phase I by H2 of FY09 and full 50,000 vehicles per annum capacity production by March FY10. The fiscal incentives will repay the cost of the project over 4 years," Ashok Leyland's CFO K Sridharan said.
Despite the slowdown in automobile industry, Ashok Leyland managed to retain its volumes and was also proceeding with its capex and product upgradation plans in anticipation of market recovery, Sridharan said.