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Ashok Leyland starts sale of luxury buses

India's second-largest truck and bus maker Ashok Leyland Ltd said on Friday it had begun selling luxury coaches, which it builds with Spain's Irizar, aimed at the inter-city travel market.

Madras-based Ashok Leyland, the flagship of the U.K.-based billionaire Hinduja brothers, said it expected to sell 350 such buses this year and 500 in 2002/03 (April-March).

"The market for these kind of (inter-city luxury) buses is estimated at between 4,000 to 5,000, a year," R Seshasayee, Ashok Leyland's managing director told a news conference.

Irizar, an over 100-year-old employee cooperative, builds bus bodies for Volvo, Scania, Iveco and Mercedes and is Europe's second-largest such firm, a company statement said.

Irizar TVS Pvt Ltd, the joint venture which Ashok Leyland, Irizar and the local TVS group set up last year, makes bus bodies at its two plants near Trichirapalli in Tamil Nadu.

The three hold equal stakes in the firm.

The buses are built on Ashok Leyland's existing bus chassis and priced between 2.0 and 2.5 million rupees depending on the features they carry.

Seshasayee said the joint venture could also make bodies for other bus makers including for its rival and market leader Tata Engineering and Locomotive Company Ltd and foreign companies. It was also aiming to export these buses.

The two Indian heavy bus makers together sold 28,032 buses in the past year to March. The third maker, the Indian unit of Swedish truck giant AB Volvo, began production only last October.

Government owned state transport undertakings buy nearly 70 per cent of all buses and private fleet operators the rest.

Seshasayee said poor demand for buses by STUs and for trucks in southern India, the company's two main markets, were the reasons why Ashok Leyland's sales by volume in the nine months to December fell about eight per cent to 19,856 units.

But he said he expected the company to post good results for the October-December quarter. "You will not be disappointed," he said. Ashok Leyland announces third quarter results next Friday.

The vehicle maker will also launch a new range of light trucks in the five to seven tonne vehicle weight segment, in the next 18 to 24 months to improve its share in the light trucks market.

The firm had a 33 per cent share of the heavy commercial vehicle market but less than one per cent of the light vehicle segment.

Ashok Leyland's shares ended down 2.4 per cent at Rs 70.60 on Friday on the Bombay Stock Exchange, while the benchmark index finished 0.7 per cent lower.

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