For the commercial vehicle segment, the company has set aside Rs 750 crore each as capex for the next two years

With demand for electric vehicles increasing, Ashok Leyland (ALL) has lined up $150- $200 million capex over a period of two years for its electric vehicle subsidiary Switch Mobility, Dheeraj Hinduja, executive chairman, ALL told media on Friday. For the commercial vehicle segment, the company has set aside Rs 750 crore each as capex for the next two years. The Hinduja flagship company is also exploring whether to set up a separate platform for light commercial vehicles (LCVs) and allot additional capex for the vertical.

Addressing media through virtual mode on the company’s first quarter performance, Hinduja said medium and heavy commercial vehicle (M&HCV) business has been growing and the company has surpassed 30% market share in the first quarter. The company is growing the network to push additional volumes. Trucks and tippers have been showing significant growth and the company is lining up Rs 750 crore each as capex for the next two years. “For the EV subsidiary Switch Mobility, we will be having a capex of $150 million to $200 million over a period of two years. That may be spent in UK and India,” he said.

Hinduja said the company is close to finalising strategic investors for Switch Mobility and the announcement is just weeks away.“We have been for the past months in discussions with many investors. We were not in a hurry to seal the deal as we want strategic investors who share our company’s vision,” he said.

ALL is on course to launch complete range of CNG vehicles by this fiscal end, despite the recent spike in CNG prices.“The fuel price escalations are temporary and we are going ahead with our alternate fuel vehicles plan,” he said adding,‘the CNG products introduced by the company have been received well’. Hinduja said that commodity prices are beginning to decline and the benefit of this will be seen in the coming quarters. Gopal Mahadeven, whole-time director & CFO, ALL, said the company is studying whether another platform is required for LCVs given that the company has always been launching differentiated products.“For that we require additional capex which may not be a lumpy one for one year, it may spread across a couple of years,” he said.

On the overall capex of Rs 750 crore each for next two years, Mahadevan said that the company, at the beginning of fiscal, typically lines up a capex some- where between Rs 500- Rs 750 crore. However, the company does not end up exhausting the whole amount. “ We are very much tight on project and capex management,”he added.

Courtesy: FE, Money Control