Ashok Leyland infuses Rs 500 crore into UK-based Switch Mobility, some funds may flow into India unit

Ashok Leyland's Shenu Agarwal said the lack of consistency in orders is the real problem, resulting in the UK factory sometimes being idle and for some periods being 'more than full'.

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26 Aug, 2025 12:21

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Hinduja group's CV maker Ashok Leyland has completed the allotment of GBP 45 million, or Rs 500 crore into its UK subsidiary Optare Plc, which is holding company of Switch Mobility, in the process increasing stake in the Yorkshire-based British bus manufacturer to by 0.41% to 93%, the company informed exchanges on April 2.

"...the Board of Directors of Optare Plc had allotted 649,63,55,352 ordinary shares of £0.001 each at an issue price of £0.006927 each (i.e. at a premium of 0.005927 per share) to the Company at their meeting held on April 1, 2025," the statement said.

Ashok Leyland had previously shared plans to invest Rs 500 crore into the holding company of Switch Mobility for capex requirement. Optare is the holding entity for Switch UK as well as Switch India, and a part of the fund is expected to flow into the Indian arm as well, Ashok Leyland had said previously.

"...of course this investment is going into Optare - a part of that will flow into Switch UK and some part may flow into Switch India for capex needs," Shenu Agarwal, MD and CEO of Ashok Leyland had said in February 2025. The funds are expected to be used to pare down the interest burden on Switch UK as well as support capex plans.

Switch UK has been struggling with poor volumes, resulting in fluctuations in revenue, and recently, parent Ashok Leyland had announced the decision to shut down one the manufacturing and assembly operations at its Sherburn facility in the UK.

Ashok Leyland's MD and CEO Shenu Agarwal said the lack of consistency in orders is the real problem, resulting in the UK factory sometimes being idle and for some periods being 'more than full'.

Electric vehicles (battery electric and plug-in hybrid) together form 15.9% of new bus sales in the EU, as of February 2025, with more than 62% of all new buses sold in the EU are powered by diesel. In all, electrically chargeable vehicles make up only 1.9% of buses in EU, as per February 2025 data from European Automobile Manufacturers’ Association (ACEA). This sluggish demand in the public transport space, where Switch UK operates, is partly due to high initial cost, range anxiety, and insufficient charging infrastructure.

Only about 7.3% of EU's passenger transport on road is undertaken by buses and coaches, ACEA said. "EV market is still kind of very, very subdued in UK against our expectations 2-3 years ago. So, we are evaluating the options for Switch UK because there we are making losses," Agarwal had said in February 2025. However, the outlook for Switch India has been very positive. "Switch India is actually going to be something that will be very value-accretive to Ashok Leyland, that is what we believe at this stage," Agarwal had said.