Ashok Leyland's African Safari
Our Corporate Bureau
01 August 2006
The Hinduja group's Indian flagship and India's second largest truck maker Ashok Leyland will set up an assembly plant in South Africa. According to a CNBC-TV18 report, Ashok Leyland plans to ride in on its recent acquisition of Czech truck maker Avia.
It's the roads of South Africa that Ashok Leyland wants to conquer. Sources say the company's planning to put up an assembly unit in South Africa. Leyland wants to use its new acquisition Avia to help it to do that.
CFO at Ashok Leyland, K Sridharan says, "We do believe that our power train, the engine and gearbox, coupled with their cabin, should be able to address the second hemisphere markets like South Africa, Middle East. More importantly Turkey, Iran and so on where the market potential is quite high and which are very price sensitive."
While company officials will not confirm it, sources say Ashok Leyland is looking for a South African joint venture partner. Ashok Leyland already sells vehicles in South Africa through a distribution arm it set up there.
Cabins from the Czech Republic, power trains from India and tyres and batteries made in South Africa will be put together there.
Ashok Leyland will not be the first Indian vehicle maker in South Africa. Tata Motors builds buses and sells its cars in South Africa. Mahindra & Mahindra sells its Bolero and Scorpio through its selling arm Mahindra South Africa.
Sources say the South African unit is due to be up and running within a year. With the acquisition of Avia, Ashok Leyland enters the light commercial vehicle segment. But sources say the group is exploring acquisition opportunities in this segment and talks are on with potential targets in Europe.