Ashok Leyland plans to invest around Rs 2,000 crore over the next two years. The commercial vehicle major said it had earmarked Rs 1,200 crore for capex in addition to investments earmarked for the various joint ventures (JVs) to the tune of Rs 800 crore.
R Seshasayee, managing director, Ashok Leyland, today told reporters that in 2009-10 capex incurred was Rs 810 crore and investments in JVs stood at Rs 142 crore. Going forward, over the next two years planned capex incurred would be Rs 1,200 crore and investments in JVs would be around Rs 800 crore.
He added, the development activities for all joint ventures are on schedule. The first batch of Light Commercial Vehicle products as part of the JV with Nissan Motor Company will roll out by early 2011.
The JV with John Deere for the construction equipment business is also well on track with pilot production set to commence at their new facility at Goomdipoondi, near Chennai, from October 2010 and products are set to roll out by early 2011.
On the prospects for the present year, Seshasayee said, "The future appears promising. On the one hand, macro-economic indicators are positive. On the other, there are issues of rising fuel and raw material prices. Come October, migration to superior emission norms will happen and we are ready with the products and the technology to improve our market share."
“While one may not expect 30 per cent plus growth levels witnessed in 2009-10.
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We are optimistic of a healthy growth of over 15 per cent for the commercial vehicle industry this fiscal,” said Seshasayee.
Ashok Leyland is planning to introduce 25 models over the next 18 months, he added.
With the recent inauguration of the manufacturing facility at Pantnagar, Uttarakhand, Ashok Leyland's annual installed capacity will be 150,500 vehicles.
Production at the new chassis and bus assembly plant at Ras Al Khaimah, UAE, has begun and, at full capacity, can roll out 2,000 buses to meet international specifications. These products, which will eventually include trucks, will be manufactured to feed the neighbouring GCC (Gulf Co-operation Council) and African markets.
Commenting on the exports, which reported a 12 per cent drop in 2009-10 to 5,979 units compared to 6,812 units, a year ago, Seshasayee said, "Our focus was on the domestic market since major markets like West Asia had collapsed and had not recovered yet. The Sri lankan market has now Returned," he added.
New markets in Africa and SAARC countries, Latin America -- Peru, CIS - Ukraine and West Asia - Saudi Arabia have now opened up.
Meanwhile, Ashok Leyland's has reported a net profit of Rs 222.66 crore for quarter-ended March 31, 2010 as compared to profit of Rs 53.31 crore. Company's total income rose to Rs 2,939 crore from Rs 1,218 crore.
"The second half of the year was good since customers were advancing purchases due to the anticipated change in emission norms, growth in CV-impacting sectors, funding for NHAI projects and liquidity in the market improved," said Seshasayee. The company has reported 98.8 per cent growth in second half of the year compared to first half of the year.