Chennai: The city based commercial vehicle manufacturer Ashok Leyland Limited will be setting up a bus assembly unit at Ras AL Khaimah, the northern most emirate of United Arab Emirates (UAE). The Hinduja group company has signed an MoU with Ras AL Khaimah Investment Authority (RAKIA) for this purpose.
In the second phase of the project the bus assembling unit will be upgraded to a vehicle assembling unit. The facility, to be built with an initial investment of US $5 million, will include a state-of-the-art paint plant for bus bodies. The unit will be managed and operated by Ashok Leyland.
To start with, the unit will have a 450-strong workforce and will commence operation in a year's time from now. The unit will also be provided an Industrial License that will enable duty free import of vehicle kits and duty free export of finished vehicles to GCC and the Middle East.
The bus assembly unit will have an initial capacity of 1,000 buses of international styling, manufacture and quality, and will start assembly using Ashok Leyland's chassis and bus body CKD kits sent from India (including Irizar TVS).
Ashok Leyland enjoys a market share in excess of 60 per cent in Dubai's standard bus market, and exports to the region are set to cross 1,500 vehicles per annum.
"The proposed unit will allow local value addition, close to a growing market for Ashok Leyland. Customers stand to benefit through better finish and timely delivery as we can avoid shipping of finished products. The vehicle assembly facility in UAE is in line with our practice of favouring local value addition in our major export markets", said Ashok Leyland's managing director, R Seshasayee.