Ashok Leyland plans Rs 550 crore capex. Looks out for acquisitions

Our Corporate Bureau
02 May 2006

Chennai: Chennai-based commercial vehicles manufacturer Ashok Leyland Limited is on the look out for acquisitions in the auto component manufacturing / design domain. At the press meet held here on Saturday to announce the FY 2006 annual results company vice chairman Dheeraj G Hinduja said, "There is good scope for engineering design and we would like to take advantage of that opportunity."

At present the group outfit Ashley Design & Engineering Services is targeting Tier 1 companies for developing, testing and validating vehicle design. A modern 400 seat design office is nearing completion. The auto components group is targetting exports worth $100 million over the next three years.

The company is investing around Rs 550 crore to increase its vehicle production capacity to one lakh units by 2008-09 from the current 77,000. "The investment will be made over a two-year period in different areas. The engine and the gear-box facility will also be expanded and some of the production lines will be modernised," said managing director R Seshasayee.

According to him, to meet the increased competition, the company is focussing on selling fully built buses. A bus body building facility in North and a bus assembly unit in the Middle East are also being planned. "A tie-up with Escorts to source 20hp to 500hp engines for industrial use and gensets was also concluded," says Seshasayee.

The company is also weighing various options for making light commercial vehicles in the 2.5- to 4-tonne carrying range. "Cascading down to lighter vehicles is not easy. The production and other lines have to be reorganised," said Seshasayee.

Among the new vehicles scheduled for launch in the current year are a 49-tonne high- power tractor and 31-tonne high-power 8 x 4 tipper. The company has already commenced development work on a Euro IV-compliant engine.