Ashok Leyland infuses Rs 87 crore in German subsidiary

Albonair GmbH works on reducing vehicle emissions

Automotive company Ashok Leyland has infused $14.35 million (around Rs 87 crore) last year in its German subsidiary, Albonair GmbH, which works on reducing vehicular emissions.

The Reserve Bank of India’s Foreign Exchange Department Overseas Investment Division’s December data showed the company has invested the amount as equity in the German subsidiary.

Earlier, Ashok Leyland had invested euro 40 million to help the arm develop affordable technologies aimed at reducing emissions meant for both  Indian and global markets.

An email sent to V Sumantran, executive vice chairman of Hinduja Automotive, and chairman of Albonair did not elicit response. Ashok Leyland’s spokesperson said they would not comment on individual operational transactions.

According to Ashok Leyland’s 2012-13 annual report, the company made investments in Albonair to address the dual objectives of acquiring competence and cost-efficiency in the critical area of future emission technologies and to use it to generate business opportunities in advanced technology components.

The Hinduja Group's flagship company Ashok Leyland claimed that Albonair has already obtained orders from large European firms in the face of stiff competition from established global players.  The German subsidiary also expanding its reach to other large automotive players in the international market and is on its way to becoming a significant global automotive supplier.

Last year the company increased its production volume. The expansion of the production area made it possible to extend the annual capacity to 200,000 dosing systems. In the newly built wing, Euro VI dosing systems will be produced for a large European commercial vehicle manufacturer.

Early in 2006, Ashok Leyland could see that the demand for vehicles complying with stringent Bharat Stage IV pollution standards was going to rise in the future.  “In 2006, we were worried how to develop an affordable technology, since the company could not afford the expensive European systems and that is when this company was born to help control the cost,” earlier says  Sumantran. He expects to capture 24% of the European market in emission-control systems by 2017.