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Ashok Leyland plans China, Pak foray

Ashok Leyland is readying to make its trucks and buses in China and Pak in 12-18 months as part of plans to hike its business overseas.

business Updated: Jan 19, 2004 19:35 IST

Chennai-based Ashok Leyland is planning to make a foray into manufacturing its truck and buses in China and Pakistan in next 12 to 18 months. The company has also chalked out a Rs 390 crore investment plan for expansion of capacity and new cab system in next two years.

Speaking to newsmen on Monday, Ashok Leyland managing director R Seshasayee indicated that the company may consider increasing its equity to fund the new investment initiatives. “We will have to consider enhancement of our equity for our investment plans. The plans have not been firmed and have to be approved by the board,” he stated.

He said manufacturing facilities in Pakistan and China would be through joint ventures with local partners. “We have not firmed up plans on extent of equity participation,” he added.

The company has also finalised its capacity expansion plans to manufacture 67,000 vehicles and 77,000 engines per annum with an investment of Rs 140 crore. The manufacturing plan for the cab system and the J series engine will entail an investment of Rs 250 crore. R&D spend for the next year will be stepped up to two per cent of turnover, he added.

He said the company’s heavy trucks and buses in future would be powered with the 260 horse power ‘J Series’ engines. “We have now got the license to make the ‘J Series F’ engine from Hino Motors. This is one of the first of three engines in its class. We will fully indigenise the engine within three-four years,” he said.

The Hinduja group company will begin export of components and assemblies to Hino Motors in the next six months. “Negotiations with the Japanese companies are in advanced stage of negotiations,” he stated.

Seshasayee said the 4026 J tractor will be the first model on offer, followed by the 3126J tipper and a modern range of buses, all of them powered by the 8 litre J series engine with an initial offering of 260 hp, which can be raised to 300 hp. The technology tie-up with Hino Motors, Japan, provides for manufacture of the J series engine by Ashok Leyland with progressive indigenisation over a period of four to five years.

Apart from making its presence in China and Pakistan, the company was also planning to expand in other overseas markets like the Middle East and South Africa, where it would export vehicles directly as fully-built units, Seshasayee said.

First Published: Jan 19, 2004 15:10 IST