Ashok Leyland has invested around $17 million (around Rs 90 crore) in its foreign subsidiaries Avia, Optare and AL Bonair. Of this, $10 million is equity in Avia, coming as it is when the Czech Republic subsidiary has joined hands with entrepreneurs to launch its models in the UK market and is planning to set up an assembling facility.
While an email that Business Standard sent to the Hinduja Group’s flagship company did not elicit response, data on outward FDI from India for March 2012 by the central office of the overseas investment division under the RBI’s foreign exchange department showed Chennai-headquartered Ashok Leyland having pumped in $10 million as equity to Avia Ashok Leyland Motors SRO, besides another $4 million as loan.
It was in 2006 that Ashok Leyland announced acquisition of the truck business unit of Prague-based Avia. During the acquisition, Ashok Leyland said Avia was part of its inorganic growth plan — and described it a significant step in securing a beachhead in the European Union and the Eastern European markets.
Recently, Avia joined hands with a group of businessmen in Staffordshire country of Britain’s West Midlands region to launch a company called Longton Avia (UK) Ltd. Initially, the new company will be importing the vehicles from Avia’s plant in Prague. Also, there are plans to build a new assembly plant at Longton in Staffordshire.
The other investments by 1948-founded Ashok Leyland was in Albonair Gmbh, Germany by way of loans to the tune of $0.89 million and $2.64 million in Optare Plc, UK. The UK company is a leading maker of advanced low-floor integral buses, and it produces a wide range of fuel efficient buses of its own integral design.
During the acquisition of Optare, Ashok Leyland said the acquisition would enable the company to get three kinds of benefits, including participation in the growth of the European bus market through Optare.