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Ashok Leyland to incur Rs 600 crore capex

Ashok Leyland, the major commercial vehicle maker, is incurring capex of around Rs 600 crore this year to enhance the cabin and engine capacity by setting up assembly units in Kenya and ivory coast, as per media reports.

The company's management said that these plants will be able to produce 200 units in the initial stage, which will be scalable to 400 units. Ashok Leylnd‘s plant in Ras-al-Khaimah will be enhanced beyond 400 units to fulfil the increasing demand in Gulf Cooperation Council (GCC) region. The company wants to set up the plant by the end of this fiscal. The company’s management also Informed that the company will be doing Rs 600 crore capex in the next fiscal as well to develop future technologies like modular vehicles.

The management added that there is still uncertainty about completion of the plant as company is facing some issue. The company plans to use Kenya plant to cater to neighbouring countries in east Africa and the Ivory Coast plant to meet the demand in west Africa

The Indian commercial vehicle industry grew at 10%-15% this fiscal. There are three major drivers of commercial vehicle sales market, GDP growth ,infrastructure and mining and all of them are surging constantly at this time. Owing to this majority of players in CV market are investing money to improve production to fulfil the demand in the market.

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