Ashok Leyland to Set-Up Regional Base in Africa for Vehicle Assembly
Published On Mar 29, 2016
Ashok Leyland is planning to set up centres in Africa to aid its production process in the region. The company believes that having local assembly points would help to strengthen its market presence in the region. Its tactics are not limited solely to Africa, and the brand is also looking to expand its vision of such centres to the Asian and Latin American colonies.
Among the various markets in the African continent, the manufacturer views Kenya as the most pivotal and ripe market to anchor its production base in. Ashok Leyland is also scouting for other vital countries in Africa to establish its manufacturing footprint.
“There are advantages being with a local partner out there as it would help in roping in dealers and spreading the brand image more effectively. Since these being assembling units, the company does not need to pump in big investment, each plant will cost close to R30 crore, or less than that,” said Gopal Mahadeven, the CFO of the Chennai-based auto brand. He believes that the African region faces a growing demand for quality merged with cost efficiency, which the firm could tap into perfectly. The market for commercial vehicles in the vast continent has also been booming off late, and the corporation hopes to set up a firmly grounded presence to supplant the needs of the rising economy. “Lot of the fleet owners are now serviced by Chinese companies and lot of them have concerns about the quality of the products. We can offer quality and premium products,” he said.
The company will be advancing on its plan at the later stage of the fiscal year. It is looking to position the headquarters for African operations in the Middle East at present. Mr Mahadeven also confirmed that the plants set up in Africa will be assembling completely knocked down (CKD) units imported from India. The company is currently surveying multiple options for the building of the plant, ranging from partnership with a local entity to independent working.