Ashok Leyland To Acquire Czech Truck Manufacturer

Posted on August 15, 2006

Heavy commercial vehicle manufacturer Ashok Leyland Limited (ALL), the Indian flagship of the Hinduja Group, has signed a framework agreement to acquire the truck business unit of Czech company AVIA a.s. Financial details were not disclosed. Following corporate and statutory approvals, the acquisition process is expected to be concluded by August. It would be ALL’s first foreign acquisition.

Based in Prague, AVIA manufactures the D Series line of trucks in the 6.0 to 9.0 tonne GVW range that are sold throughout Europe. The acquisition covers the facility at the heart of the Czech capital, with an annual production capacity of 20,000 vehicles, along with an advanced cataphoretic paint shop and R&D facilities.

"AVIA is part of our inorganic growth plan and is a significant step in securing a beachhead in the European Union and the Eastern European markets,” said Mr. R. Seshasayee, managing director of Ashok Leyland. “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."

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. Since their launch in 2001, the D series trucks consisting of 6.0, 7.5 and 9.0 tonne GVW models are marketed in the Czech Republic, Hungary, the U.K., Ireland, Italy, Slovakia and Spain. With a width of 2.15 m., the D series trucks have a modern, compact cabin with both day and sleeper versions. They are powered by Cummins ISB engines rated 150 hp and 170 hp and feature ZF 5.42 and ZF 6S 850 gearboxes.

In June, AVIA unveiled D120, a 12 tonne model as well as D110 and D100, 11 tonne and 10 tonne models. The new trucks also feature the all-new 4.5 L Cummins ISB Euro 4 engine with Selective Catalytic Reduction (SCR) technology. The new Cummins engines offer power outputs of 140 hp, 160 hp and 185 hp.