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Apr 21, 2017 04:40 PM IST | Source: Moneycontrol.com

Ashok Leyland plans to invest Rs 500 cr every year for new launches, open new plants

The company will inaugurate new assembly facilities in Kenya and Ivory Coast to begin with while doubling capacity at the Ras Al Khaimah plant, all of which will happen this financial year.

Ashok Leyland plans to invest Rs 500 cr every year for new launches, open new plants

Swaraj Baggonkar

Moneycontrol News

Truck and bus maker Ashok Leyland today announced plans to invest Rs 500-600 crore every year into launching new products, open two new assembly plants in Africa and venture into new global markets and aggressively bid for defence contracts.

The company will inaugurate new assembly facilities in Kenya and Ivory Coast to begin with while doubling capacity at the Ras Al Khaimah plant, all of which will happen this financial year.

It is getting ready to supply the first consignment of Boss trucks to Russia later this month. "We will enter every market which has a monthly market of 200 vehicles", said Vinod Dasari, Managing Director, Ashok Leyland.

Each assembly plant will cater to at least six countries. However, the one in Bangladesh which it opened earlier this month will be for captive use only but may look to cater the north eastern states of India.

Ashok Leyland is presently competing in only 25-30 percent of the potential defence pie and would thus aggressively expand its reach with new products for the Indian Army.

"We won 12 out of the 13 bids that we competed for in defence. We recently bagged the contract to supply 4X4 mine-protected vehicles to the Army. We are looking to increase revenues from defence business to 5,000 crore from the current Rs 500 crore", added Dasari.

The Chennai-based company also said that the sudden switch to BS-IV level had created problems for 10,664 of its vehicles as they were of BS-III variant. However, there was no significant  financial impact of it, the company claimed.

"About 95 percent of the BS-III vehicles were with us, not dealers as they are on cash and carry basis. So we have already started the process of upgrading them to BS-IV and already 250 of them are upgraded using our indigenously developed iEGR technology", added Dasari.

It will take 2-3 months for the company to convert all the units to BS-IV which will incur a cost of Rs 20,000 per engine. The iEGR technology was developed by Ashok Leyland after a four-year research. The company is not patenting the technology as that would mean disclosing the details of it to the IPR bureau.

Intelligent Exhaust Gas Recirculation (iEGR) technology is a simple yet innovative solution to achieving the desired results in order to meet the BS-IV norms. The company will be the only one to implement this technology for its products above 130hp.

Dasari did not disclose the investment made by the company to develop the iEGR technology but stated that around 200 engineers worked on the project.
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