Ashok Leyland to invest Rs.2000 crore over two years

CHENNAI - Commercial vehicle manufacturer Ashok Leyland will invest around Rs.2,000 crore over a two-year period at its plants as well as in joint ventures.

The company has got the shareholder’s nod to raise a debt of Rs.700 crore.

Speaking at the company’s annual general meeting here Tuesday, Managing Director R. Seshasayee said the company had invested around Rs.810 crore in 2009-10 in its facilities and Rs.142 crore in the joint ventures.

He said around Rs.1,200 crore will be invested in the company’s own facilities and Rs.800 crore in joint ventures.

Chairman R.J. Shahaney said the joint venture with Japanese automobile company Nissan Motor would make Ashok Leyland a full-range commercial vehicle player.

He said the first light commercial vehicle built jointly with Nissan will roll out next year.

Ashok Leyland is also looking for land to set up a greenfield facility to make the light commercial vehicles.

On the joint venture with John Deere for making construction equipment, officials said it is on track and pilot production will start by the end of this year and the first vehicle to roll out early next year.

According Seshasayee, the year ahead is promising with 15 percent growth. The company plans to launch 25 truck models over the next 18 months.

Ashok Leyland closed the first quarter of the current fiscal with a turnover of Rs.2,348 crore and a net profit of Rs.122.64 crore as against Rs.912.5 crore and Rs.7.7 crore earned during the corresponding period of the previous year.

The company had sold 21,400 units (domestic 19,460 units, exports 1,940 units) during the first quarter.

“Our first quarter numbers reflect the momentum that we picked up in fourth quarter of the last fiscal which is reflected in the fact that we have gained market share touching 27 per cent,” said Seshasayee.