Ashok Leyland has put ‘on hold’ the proposed Rs700-800 crore investment at its facility in Pantnagar and its mother plant at Chennai owing to slowdown in the domestic market.
Ashok Leyland sales fell 12.5% to 35,302 vehicles in the April-October 2008 period with buses and medium and heavy truck sales posting maximum decline. The company has cut production to a four-day week in tune with slowing demand.
The company’s proposed new plant at Pantnagar in Uttrakhand had an initial investment outlay of Rs1,200 crore. The plant, which has a capacity to produce 40,000 vehicles a year, has been delayed and is now expected to go on stream next year.
Ashok Leyland has already invested around Rs1,000-1,050 crore at its brownfield operations in Chennai, Hosur, Bhandara and Alwar in Rajasthan. Investment was deferred for the heavy commercial vehicle making units in Chennai and Pantnagar.
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