Ashok Leyland enters construction equipment biz

Hinduja group company  Ashok Leyland has entered the Indian construction equipment industry by launching its first product — Backhoe Loader — in joint venture with US’ John Deere.

The 50:50 joint venture is named as Ashok Leyland John Deere Construction Equipment Company Ltd launched. Priced at Rs 23.5 lakh, ex-Tamil Nadu, the product is branded as Leyland Deere.

The partners have roped in companies like TVS & Sons for distribution across the four southern states.

As part of Phase I the JV partners had invested  Rs 200 crore. This includes setting up of a greenfield facility at Gumindipondi, 50km from here, said V Sumantran, chairman,  Ashok Leyland  John Deere Construction Equipment Company.

Phase I will have a capacity of 10,000 units by 2016-17, of which 8800 units will be Backhoe. "The product would cater to the Indian customers. For now we will focus only on domestic market" said Sumantran.

The engine will be supplied by Ashok Leyland. The company is planning to launch the second product Wheel Loader, which is expected to be rolled out in 2013.

At present, the Backhoe market is around 20,000 units a year and was growing at around 30-35 per cent.