Ashok Leyland Ltd is readying to manufacture its trucks and buses in China and Pakistan within the next 12-18 months as part of plans to increase its business in overseas markets, R Seshasayee, managing director of the company, said on Monday.
The company is also investing Rs 140 crore (Rs 1.40 billion) in hiking its vehicle production capacity by 17,000 units to 67,000 vehicles and 77,000 engines annually by July 2004.
Besides, Rs 250 crore (Rs 2.50 billion) will be spent on the development of a modern cabin for its trucks and the new fJF series engine, under technical alliance with Japan's Hino Motors, Seshasayee told a press conference at the ongoing Auto Expo in New Delhi.
To fund the capacity expansion over the next two years, Ashok Leyland is considering an option to raise equity in the near future.
"Equity raising will be considered in due course of time but I cannot give you any details on that," Seshasayee said.
The Hinduja Group flagship expects to increase its vehicle exports by 35 per cent to 3,500 vehicles during the fiscal ending March 31, 2004, he said, adding the first consignment of 200 vehicles to Iraq will be shipped by the end of this month.
Ashok Leyland had received an order for 3,300 trucks to ship to the war-ravaged nation under the jurisdiction of the United Nations. The company's total sales this fiscal were expected to grow in line with the commercial vehicle industry growth of over 30 per cent, he said.
Ashok Leyland's domestic sales during April-December 2003 surged by 39.7 per cent to 30,501 while exports jumped 79.8 per cent to 2,275 units.
Seshasayee said a decision to export components to Japan's Hino Motors for assembling and manufacturing engines was also expected to be taken within 6-12 months.
"We are looking at overseas markets aggressively and in 12-18 months, we hope to enter China and Pakistan through joint ventures. China should be a 50:50 venture with a partner there. We are yet to firm up our plans for Pakistan," Seshasayee said.