Ashok Leyland, the flagship company of Hinduja Group, will be commencing work on its new factory at the start of FY-25. This plant will come up in Uttar Pradesh and will be primarily engaged in the manufacturing of Electric Vehicles (EVs).
Speaking with The Hindubusinessline on 2nd January 2024, Mr. Shenu Agarwal, MD & CEO of Ashok Leyland, said, “We expect to finalise the land area before the end of this fiscal and the construction work will start within a couple of months after that“.
Initial Investment of 200 Cr. with Capacity of 2,500 Buses Annually
Earlier in September 2023, Ashok Leyland stated in its stock filing that it has signed a Memorandum of Understanding (MoU) with the UP government to set-up a bus manufacturing factory. The company will initially invest Rs. 200 crore in this upcoming plant. Further, the company clarified that investment in this plant will be made through a combination of its internal accruals and borrowings.
Ashok Leyland to Develop New Bus Plant in Lucknow
Ashok Leyland’s upcoming facility will come up close to the now inoperational facility of Scooters India, close to Lucknow airport.
Ashok Leyland stated that the plant’s initial capacity will be 2,500 buses per year and will be expanded to 5,000 buses per annum in due course of time based on market demand.
Ashok Leyland’s New Plant to Produce Electric as well as Non-Electric Vehicles
Ashok Leyland’s upcoming factory will manufacture both electric as well as ICE (Internal Combustion Engine) vehicles. This upcoming plant will produce electric buses and light commercial vehicles.
Explaining the rationale behind its upcoming facility, Ashok Leyland stated in its stock filing dated 15th September 2023, “Production of electric buses, with the flexibility to also assemble other vehicles powered by currently available fuels as well as emerging alternative fuels, to cater to the growing market demand”.
Investments in Indian EV Market to Surge Past USD 200 Bn
The Hindubusinessline reported on 28th August 2023 that the investments in Indian EV market are expected to reach over USD 200 billion over the next 8 to 10 years.
Furthermore, Compounded Annual Growth Rate (CAGR) of Indian EV market is expected to be 49%, considering a period from 2021 to 2030.
Ashok Leyland’s investment in its upcoming e-bus manufacturing facility aligns with India’s growing Electric Vehicles market.
Ashok Leyland’s Investment driven by its Net Zero Goals – Company CEO
Commenting on this development, Mr. Agarwal, said, “Ashok Leyland’s mission to achieve Net Zero by year 2048 is one of the triggers to set up this plant in Uttar Pradesh. Contingent on market adoption and demand of alternative fuel vehicles in the state, Ashok Leyland intends to invest up to INR 1000 crores in this new facility over the next few years“.
About Ashok Leyland: Ashok Leyland, the Hinduja group’s flagship, is the 2nd largest manufacturer of commercial vehicles in India. Headquartered in Chennai, the company has nine manufacturing facilities across the world, seven of which are in India.