Ashok Leyland, arms invest in UAE subsidiary

The company bets big on the UAE plant, which is expected to assemble its UK arm Optare products

To strengthen its UAE arm, Ashok Leyland and its two investment arms - Ashley Holdings Ltd and Ashley Investments Ltd - have infused around Rs 45 crore in Ashok Leyland UAE LLC. This comes at a time when Ashok Leyland is betting big on the UAE plant, which is also expected to assemble its UK arm Optare products - mainly Solo - for West Asia and other markets.

Ashok Leyland's spokesperson was not available for comment. However, the Reserve Bank of India's overseas investment data during March, showed Ashley Holdings had invested $2.14 million, Ashley Investments $2.1 million while Ashok Leyland had invested $2.85 million as equity in the UAE subsidiary, which achieved cash break even recently.

The company attributed the break even to increase in sales, which stood at 1,250 vehicles in 2012.

In 2007, the company had inked an MoU with the Ras Al Khaimah Investment Authority to set up a facility at Ras Al Khaimah. The facility reached its peak capacity by rolling out four buses a day.

The plant is crucial for its international operations as vehicles from this plant feed the West Asian and African markets, where the company is active, according to a company official.

As UK remains difficult, it is necessary to look at new markets with the help of parent Ashok Leyland's network and drivelines, Optare officials were quoted in a report. The company had built 400 vehicles for the UK market and delivered 190 kits to South Africa in 2012. It expects to do around 500 buses and 200 kits looking ahead.