Ashok Leyland to up capacity by 50 per cent

Hinduja Group flagship, Ashok Leyland, a truck and bus manufacturer, is increasing capacity of its commercial vehicle production to 150,000 units per annum, a growth of 50 per cent over the current capacity by end of March 2010. The new capacity is being added at a new plant under construction in Uttarakhand.

R N Rao, special director, sales & marketing, Ashok Leyland said the company is going ahead with its expansion of capacity despite a drop in sales during the current financial year owing to economic slowdown in the country. The company is likely to close the current financial year ending March 2009 with a 30 per cent drop in its sales to around 60,000 units including exports compared to the last fiscal, he said.

In 2007-08, Ashok Leyland had sold 86,000 units (trucks and buses put together) including exports. Currently, the company has manufacturing plants in Tamil Nadu (Hosur, Trichy) and Alwar in Rajasthan.

Speaking to reporters at the first Bus and Special Vehicles Expo 2009 organised by ACMA, SIAM and CII, here today, Rao said the company will start delivery of 950 buses to Delhi Transport Corporation (DTC) which includes 350 air conditioned buses from April this year. In addition to this order, the company is also participating in the tenders being floated by various state transport undertakings as part the Jawaharlal Nehru Urban Renewal Mission (JNNURM).

“We are participating in the tenders being floated by the state governments for the first phase which covers 25 cities. The order size is around 9,000 buses and we expect to grab close to 60 per cent of this order,” Rao said.

Ashok Leyland, he said, has developed ultra low entry buses with a floor height of 390 mm offering ‘step-less entry’ for urban transport segment. These buses are available in both CNG and diesel versions.

During 2009-10, the company hopes to sell 20 per cent more buses, he said adding that the economy will bounce back towards the end of the next fiscal. In 2007-08, it had sold 15,000 buses, a growth of 10 per cent over the previous year. With orders expected under JNNURM project, the company hopes to grow its total sales by 18-20 per cent, he added.

In 2007-08, Ashok Leyland reported a turnover of $2 billion with exports accounting for $100 million.

Ashok Leyland has also entered the inter-city segment with its new luxury coach - Luxura, which is currently sold to Andhra Pradesh State Road Transport Corporation. Currently, the company has delivered 10 buses to APSRTC and has got orders for another 25 buses.

The company has priced this bus at Rs 51-61 lakh and hopes to compete with Volvo in the segment, Rao added.