‘Leyland to focus capex on alternative fuel tech’

Ashok Leyland, a Hinduja Group flagship company, will channel its capital expenditure towards developing various alternative fuel technologies for commercial vehicles over the next 18 months, even as it works on lowering development costs with partners, executive chairman Dheeraj Hinduja said.

The company, known for its trucks and buses, has earmarked a capex of ₹600-700 crore for this financial year, and a significant part of it will be directed towards creating products with alternative fuel systems, such as hydrogen fuel cell buses, hydrogen-powered internal combustion engine (ICE) trucks, electric intermediate-trucks, as well as vehicles running on compressed natural gas (CNG) and liquefied natural gas (LNG).

Leyland’s net-zero emissions subsidiary Switch Mobility has rolled out a range of electric light commercial vehicles (the IeV range) for last-mile transportation. Separately, Leyland is also investing in developing a sub two-tonne commercial vehicle category.

“Our capex requirement for this year is in the range of ₹600-700 crore, and a lot of it is going to this alternative fuel development. Our major capex programme happened a few years ago when we developed Avatar Modular range, and Bada Dost. Now, we are looking at the sub-two-tonne truck but in this financial year and the next 18 months or so, the focus is on alternative fuel types. We have jointly developed a product with NTPC—a hydrogen fuel cell bus. We have developed a hydrogen ICE truck with Reliance Industries," Hinduja said.

“In many respects, we are looking at partnerships where customers require a product and we develop the product with them as well. This not only improves our overall development cost, but we get the customer to use the product immediately. I do see this number (capex) growing over the next few years as we go forward," Hinduja added.

“Our competitiveness depends on these alternative fuel vehicles. We don’t want to put a (capex) number for it right now, as it might appear that we’re spending so much on development, whereas the requirements should be a lot higher. One key aspect that we always see to is how we can develop in the most cost-effective manner, and that’s where the innovation and agility that Ashok Leyland is known for come into play. That’s why a number in terms of investment might not be reflective of our true effort."

In its 75th year of operations, Ashok Leyland is also looking to build a “complete" portfolio of light commercial vehicles to fill gaps where it is not currently competing, he said. The company also sees opportunities to be a significant global player with export volumes rising steadily, Hinduja added.

“Our ultimate goal is to ensure we have a product for all segments of this market. So, right from a sub-two-tonne truck to the 55-tonne segment, wherever there are pockets we have thus far not been able to fill, that is our first requirement. Beyond that, we are very actively working toward making sure our LCV range becomes a complete portfolio."

“Although (LCV) volumes might be declining, they’re still very high. We’ve got close to 35% of the market. Being a commercial vehicle manufacturer, wanting to have products available in all categories, we need to be focused on large volume of vehicles. I would say the secret is that India will always be a very cost-competitive market, and our approach aligns with it," Hinduja said.