The Hindu : Business : Ashok Leyland to buy Czech truck unit

Online edition of India's National Newspaper
Thursday, Jul 20, 2006

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Business

Ashok Leyland to buy Czech truck unit

Special Correspondent

Acquisition expected to be completed by August-end

CHENNAI: Ashok Leyland, the flagship company of the Hinduja group, has inked a `framework agreement' to acquire, for an undisclosed sum, the truck business unit of AVIA a.s., headquartered in Prague, Czech Republic. This is, perhaps, the first time that an Indian truck company is gaining a toehold in the European market.

AVIA makes the D Line trucks in the 6T to 9T GVW range and has marketing presence in Europe.

The AVIA facility has an annual production capacity of 20,000 vehicles. It has a state-of-the-art paint shop and R&D facilities. The deal is subject to completion of certain terms and corporate and statutory approvals by both Ashok Leyland and AVIA. The acquisition is expected to be complete by the end of August.

While declining to divulge the deal size, R. Seshasayee, Managing Director of Ashok Leyland, merely said, "it is not a big investment.''

"AVIA is a part of our inorganic growth plan and is a significant step in securing a beach-head in the European Union and the Eastern European markets. The acquisition will also give us a modern, international vehicle for our light and medium commercial vehicle range of trucks for India and other export markets,'' a release quoted Mr. Seshasayee as saying. "The strategic location of AVIA also opens up possibilities of using its facilities as an assembly and marketing base for some of Ashok Leyland's future products on the anvil,'' the release quoted him further saying.

Since their launch in 2001, the D series trucks consisting of 6T, 7.5T and 9T GVW models are marketed in the Czech Republic, Hungary, the U.K., Ireland, Italy, Slovakia and Spain. With a width of 2.15 meters, the D series trucks have a modern, compact cabin with both day and sleeper versions.

They are powered by 150 hp / 170 hp Cummins ISB engines and feature ZF 5.42 and ZF 6S 850 gearboxes.

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