Ashok Leyland Plans To Enter US Market

Thread Starter #1
Feb 10, 2012
US foray in mind, Ashok Leyland plans JV for Czech arm.

Ashok Leyland plans to enter the US truck market through its European subsidiary Avia and is currently scouting for a local partner there.

The company is open for joint venture, contract manufacturing or even a distribution tie-up in the US, top officials said.

"We have got a lot of requests to bring in AVIA in the US market, but we want to make sure that we have a range of products to go with," Dheeraj Hinduja, chairman of India's second-largest truck maker, told ET.

TomaS Jioieka, COO of Avia, said it is in discussion with potential partners for a joint venture or third party structure. "Even the option of 100% owned company is part of the thought process," he said, adding, "If everything goes well, we should start selling trucks in US by 2014."

The Czech Republic truck maker, which Ashok Leyland took over in 2006, is already working on the range of 7-15 tonne trucks for the US market. It is working with engine supplier Cummins to develop an engine that complies with the US Environment Protection Agency norms.

Avia has already signed a deal to supply truck body parts-250 kits of cabs and chassis-to Smith Electric for the US market this year.

Avia, which makes light duty trucks in the range of 9-12 tonnes, is now working on 15-tonne and 18-tonne trucks in coordination with Ashok Leyland's R&D centre in South India.

USA is one of the largest light duty truck markets in the world with annual volumes of 100,000 units and it has the potential to become Avia's largest export market.

With the European market going through difficult times since the past 3-5 years, Ashok Leyland hopes that addition of newer markets such as Singapore, Malaysia, Kenya, Middle East and Latin America will help its Czech arm achieve cash break even by 2013.

Avia currently has a turnover of around $22 million. It sells about 650 trucks annually and exports to 35 countries. It is aiming to sell 1,000 trucks in 2012 and 2,000 in 2013.

US foray in mind, Ashok Leyland plans JV for Czech arm - The Economic Times

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