Commercial vehicle major Ashok Leyland is planning to set up new manufacturing facilities in Andhra Pradesh and Telangana. The Chennai-based company is expanding its manufacturing base into the neighbouring states and looking at other states to cut down the freight and logistics cost, besides addressing inventory related issues and demand, said a senior official.
While the state government of Telangana has confirmed the development adding that the initial investment would be around Rs 500 crore, company sources don't want to comment on the investment numbers, but confirmed that it has signed a memorandum of understanding (MoU) with the Telangana government
Initially, the company is planning to set up bus assembling and building facilities, followed by a truck plant, which is expected to provide direct employment to over 1,000 people.
It may be noted, earlier Ashok Leyland has signed a MoU with the Andhra Pradesh government during the partnership meet in Vizag to establish a manufacturing unit in the area.
Company sources said that few more state governments have approached the company to set up facilities and it is considering the same.
"We want to partner with state governments which are being progressive," said an official adding that as the bus body code is eminent in all the locations, the company want to be close to the customers. This will also help to cut down logistics and freight cost.
Besides, state governments are also giving incentives to create jobs locally and the products would receive well if the products are given fresh. In transit, there are chances of damage and delays, which will raise inventory issues with the dealers.
Officials have said that the company is planning to set up similar small units, mainly manufacturing and assembling, in India as well as abroad.
The company which has five facilities in India including Pantnagar, Alwar, Bhandara, Hosur and Ennore. Besides, it also has facilities in the UAE and the UK.
The commercial vehicle major also plans to set up assembling facilities in Kenya and Ivory Coast and also initiated plans to set up an assembly plant in Dammam, Saudi Arabia. This comes on the backdrop of company's expansion in the global market.