After Hinduja Group announced an investment of Rs 400 crore to develop new LCVs or Light Commercial Vehicles, Ashok Leyland will further invest Rs 600 crore to set up new assembly units in Andhra Pradesh, Kenya and Ivory Coast. The company expects the Indian commercial vehicle industry to grow by up to 15 percent this fiscal year. "We will have CapEx (capital expenditure) to enhance the capacity of cabin and engines. We will not be building new plants for enhancing overall capacity," Vinod Dasari, Managing Director, Ashok Leyland told PTI.
Dasari further added that the second aspect which would be fulfilled by this investment would be in the development of modular platform and compliance of its products with BSVI emission norms. According to the company's investment plans, the new units will be smaller with the initial capacity of rolling out 200 units every month. The production capacity of these units will be stretchable to 400 units per month if needed.
The new plant in Kenya will cater to East Africa while the Ivory Coast unit will serve the West African commercial vehicle market. The first quarter has been slightly dull for the Indian commercial vehicle segment due to the change of emission norms from BSIII to BSIV as per the company. “The first quarter will be a bit slow as people are still evaluating the BS-IV transformation. However, there is a lot of pent-up demand which we think will transform into sales sooner rather than later," added Dasari.
The company recently also used its indigenous technology to upgrade 10,000 units of its BSIII vehicles to comply with BSIV emission norms.
The cost of installing the new system for each vehicle will be Rs 20,000 which would also increase the fuel efficiency by 10 percent. Since most of the units were lying in the company's stock yard, the cost of transportation from a dealer back to the facility will be saved.