Ashok Leyland to set up two bus units in Africa

Commercial vehicle major Ashok Leyland (ALL) on Friday said it is in the process of setting up two to three assembling units for buses and trucks in African countries.

The company, which is of the view that having local manufacturing or assembling footprint across the countries makes for a major impact, will also be looking at South America and South East Asian countries to set up assembling units in near future.

The Chennai-based auto major has zeroed in Kenya, as one of the potential locations, out of the proposed plants planned in Africa and is on the look out for identifying other locations.

ALL will start executing the African plan from fourth quarter of the current financial year.

The company is planning to make Middle East- where it has got significant presence- as the headquarter for African operations. In a long run, over a period of 5 years, the company is planning to set up assembling facilities in countries in South East Asia and in South America.

Speaking to select media persons here on Friday, Gopal Mahadeven, CFO, Ashok Leyland said the African plants will initially assemble completely knocked down (CKD) as well as semi knocked down (SKD) kits from India. The company is looking at various options including whether to tie up with local partner to build the plants or independently establish them.

“ There are advantages being with a local partner out there as it would help in roping in dealers and spreading the brand image more effectively. Since these being assembling units, the company does not need to pump in big investment, each plant will cost close to R30 crore, or less than that,” he said.

According to him, there are a huge market for buses and trucks in African countries as the company could offer quality products at competitive prices.

“Lot of the fleet owners are now serviced by Chinese companies and lot of them have concerns about the quality of the products. We can offer quality and premium products,” he said.

Ashok Leyland Limited