Ashok Leyland stops production at Avia's Prague unit

Company attributed decision to global economic slowdown

Commercial vehicles maker Ashok Leyland Ltd, a Hinduja Group company, has decided to stop production at its Czech Republic subsidiary Avia’s plant in Prague from this month. The company has attributed the decision to global economic slowdown. Avia Ashok Leyland Motors has been part of Ashok Leyland since 2006 and producing trucks in the range of 6.5-12 tonnes GVW (gross vehicle weight) rating.

“Due to the current global economic slowdown, Ashok Leyland has decided to cease production activities at the Letnany plant in Prague as of July 31, 2013,” the company said in a statement. The company, however, will continue to provide aftermarket support for warranty and spare parts to all its customers and future products would be made available from other manufacturing sites of Ashok Leyland, as and when the economic situation improves. Avia sold 1,003 vehicles in 2012, compared to 600 in 2011, an increase of 67 per cent.  

“The economy in Europe continues to be bearish and continues to put severe strain on Avia,” said the company.

Ashok Leyland had recently said it had lined up four launches for the current financial year. These include the launch of two cargo carriers A Truck (named as Boss for 8-15 tonne GVW) and N-truck (vehicle with a new cabin from Avia, a 16 tonner). The models, which are expected to be launched before October this year, will be manufactured at the company's Pantnagar facility and the trucks will have Avia's Cabin.

Early this year, Avia said the year 2013 will be an important one for it for stabilising business in new markets, “improving our production efficiency and successfully introducing innovations to its product portfolio.”

Avia, founded in 1919, began as an aircraft and engine manufacturer. Aerospace technology is renowned for its high quality and precision – the DNA on which the current form of the company is built. In the post-war era, it became involved in the automotive industry. Besides trucks, the company even manufactured armoured transporters for the army.
SLOWDOWN EFFECT

• The company has attributed the decision to global economic slowdown
• It will continue to provide aftermarket support for warranty and spare parts to customers
• It had recently said it had lined up four launches,  including two cargo carriers, for the current financial year. Now they will be manufactured at the company’s Pantnagar facility