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Kenya: Ashok Leyland to set up assembly plant in Kenya, rolls out new LCVs in India




Ashok Leyland is planning to set up a bus assembly plant in Kenya with an annual capacity of 1,200 units, to act as a base for the East African region.

IHS Markit perspective

  • SignificanceAshok Leyland has confirmed plans to set up a bus assembly plant in Kenya with an annual capacity of 1,200 buses. The automaker has also launched two new commercial vehicle models in India.
  • ImplicationsThe automaker's investment in Kenya comes on the heels of expansion of its plant in the United Arab Emirates. Both moves are part of Ashok Leyland's strategy to expand into newer markets without incurring heavy capital investments.
  • OutlookDemand in the sub-Saharan Africa region is expected to grow in the coming years following the execution of large infrastructure projects to improve road networks. Meanwhile, the newly rolled-out Guru and Partner models will further strengthen Ashok Leyland's presence in the intermediate and light commercial vehicle segments in India.

Ashok Leyland plans to set up a bus assembly plant in Kenya, reports the Standard Digital, citing the country's industrialisation cabinet secretary Adan Mohamed. "Ashok Leyland will be establishing an assembly plant in Kenya following engagements with their leaders in India," said Mohamed on his official twitter handle, without disclosing further information. "We are setting up a bus assembly plant in Kenya through a wholly-owned subsidiary. This plant will have an annual capacity of 1,200 buses," confirmed Ashok Leyland senior vice-president (Global Buses) T Venkataraman. The executive added that the assembly plant would cater for local demand as well as demand from the wider East African region. Ashok Leyland trucks and buses are currently marketed in Kenya by TruckMart East Africa.

New CV models in India

Separately, the commercial vehicle (CV) player has rolled out its new Guru intermediate commercial vehicle (ICV) along with a new version of its Partner light commercial vehicle (LCV) in India, reports the Hindu Business Line. "The new launches address the two segments between [the] 5-tonne and 12-tonne range where we were weak. Guru has been developed in 18 months as against a normal time frame of three–four years," said Ashok Leyland CEO Vinod Dasari. The Guru is being made available in Bharat Stage III (BS-III) and BS-IV variants and caters to a wide range of applications in the 12- and 13-tonne categories. The vehicle is equipped with Ashok Leyland's latest H-Series engine. The Guru range is priced between INR1.43 million (USD21,076) and INR1.67 million in Chennai.

The automaker has also updated its Partner LCV, which now sports higher payload capacity. The updated version is equipped with a BS-IV-compliant engine and is available in four- and six-tyre variants. The vehicle sports a modern Euro cabin with air conditioning as standard fitment and is priced between INR1.03 million and INR1.06 million.

Outlook and implications

The latest announcement effectively confirms earlier reports suggesting that the automaker was looking to invest in an assembly plant in Kenya. Ashok Leyland's new assembly plant will help the automaker capitalise on the opportunities in the region. Demand in the sub-Saharan Africa region is expected to grow following the execution of large infrastructure projects to improve road networks. However, the automaker has not disclosed when the new plant will become operational. Ashok Leyland has already made a similar investment in its joint-venture plant in the United Arab Emirates, which also caters to Africa as well as Gulf Co-operation Council (GCC) markets. Africa is a natural fit for Indian manufacturers given their expertise in developing low-cost solutions.

Meanwhile, the newly rolled-out Guru and Partner models will further strengthen Ashok Leyland's presence in the Indian ICV and LCV segments. The launches are part of the company's strategy of launching more variants in the Indian market. Although Ashok Leyland is a major player in India's medium and heavy commercial vehicle segment, it is a relative fringe player in the LCV market, which is dominated by Mahindra & Mahindra (M&M) and Tata Motors. Prior to the Partner, Ashok Leyland's presence in the LCV segment was limited to the Dost. Both the Dost and Partner were developed under partnership with Nissan. Although this partnership has since been taken over by Ashok Leyland, Nissan has agreed to offer technical support on platforms developed under the venture.

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The above article is from IHS Automotive Same-Day Analysis of automotive news, events and trends, and is a deliverable of the World Markets Automotive Service. The service averages thirty stories per day and also provides competitor and country intelligence. Get a free trial.