Demand dip: Switch Mobility UK likely to shut down its Sherburn plant

The company is expecting to double its bus sales from around 450 this financial year to around 1,000 next financial year, owing to a rise in demand in the Indian market

Commercial vehicle major Ashok Leyland on Wednesday said the board of its step-down electric vehicle (EV) subsidiary Switch Mobility Ltd, UK (Switch UK) has cleared a proposal to start consultations with employees for a potential cessation of manufacturing and assembly activities at its Sherburn facility following a decline in demand in the UK market.

 

“We are not planning to exit the UK market and will execute all the orders in our hand,” said Shenu Agarwal, managing director and chief executive officer of Ashok Leyland, addressing an investor call. Switch will continue to provide aftermarket services in the UK. 

 

At present, the company has 240 employees in the UK. A section of them will be retained for existing operations.

 

“In the wake of continuing general economic uncertainty within the overall bus manufacturing sector in the UK and consequent inability to derive the benefits of scale, the board of directors of Switch UK today approved the commencement of the consultation process with the employees, which could potentially lead to cessation of its manufacturing and assembly activities at its Sherburn facility,” Ashok Leyland said in a regulatory filing.

 

The company will continue to provide service support from two other facilities in Rotherham and Thurrock for existing vehicles, the filing added.

 

The company said that it is already on track to achieve earnings before interest, taxes, depreciation and amortisation breakeven and is expected to achieve profit after tax breakeven in four to five quarters.

 

The company hopes to double bus sales from around 450 this financial year to around 1,000 next financial year, owing to a rise in demand in the Indian market.

 

Its sales of electric light commercial vehicles this year are above 1,000 units. The company is expected to post a revenue of around ₹900-1,000 crore this financial year.

 

“A large part of Switch’s value is contributed by India investments. We are not anticipating any further and immediate equity infusion in Switch UK,” Agarwal added.