Ashok Leyland to set up assembly unit in SA by 2007-end

In August CNBC-TV18 had broken the news that Ashok Leyland was going to set up an assembly unit in South Africa. And today for the first time the group's management has confirmed this. Not just that, in another exclusive CNBC-TV18 finds that Ashok Leyland's has shelved its plans to enter Turkey.

By the end of 2007, Ashok Leyland will be assembling heavy-duty vehicles in South Africa. The company says it will sell about a 1000 vehicles in the first year from its new facility, mainly in South and Central African countries.

R Seshasayee, MD, Ashok Leyland says, "That would address a range of vehicles. This would also include some part of this being sourced from Avia and some part from the Indian unit. We would then be designing appropriate products for the South African market."

The cabins will be sourced from Ashok Leyland's recently acquired Czechoslovakian subsidiary Avia, the transmissions from India and tyres and batteries from South Africa. Ashok Leyland also says that its bus assembly unit in Ras-al-Khaimah in United Arab Emirates will be functional in eight months time. This unit will sell 1000 units next year in countries in the Middle East and North Africa.

But Ashok Leyland has put on hold its plans to set-up an assembly unit in Turkey and is instead in talks with companies there for future collaboration.

With the acquisition of Avia, Ashok Leyland has entered the light commercial vehicle segment. Sources say the company wants to further reinforce this and is exploring acquisition opportunities in the LCV segment and talks are on with potential targets in Europe.