Prague: Ashok Leyland, the Indian flagship of the Hinduja Group, has acquired the Avia Truck Business Unit, a leading vehicle manufacturer in Europe, at an estimated cost of around $35 million.
Started as an aircraft and engine manufacturer in 1919, Avia diversified later into trucks and signed license agreement with Renault in 1967. In 1995, Avia was acquired by Daewoo Motor Corporation Ltd with a majority share.
But despite huge investment, its ambitious programme to have a strong base in Europe in light commercial vehicles and intermediary commercial vehicles, failed to materialise as it went into bankruptcy in 2000.
The acquisition of the project by Ashok Leyland is expected to help the leading Indian heavy vehicle manufacturer to have a good product. It will be the first Indian company to have a truck-manufacturing unit in Europe.
At a reception held at the residence of the Indian Ambassador to Czech Republic P S Raghavan, to mark the occasion, R Seshasayee, Managing Director of Ashok Leyland Limited said "the Indian business is looking keenly at investments in European Union both in manufacturing and service industries."
The reception was attended by the Deputy Finance Minister of Czech, Dana Prezziovia, British Ambassador Linda Duffield, MPs, MEPs and officials of the Ministry of Foreign affairs and Economic and cultural centres.
Seshasayee, who is also President of the Confederation of Indian Industries, noted that Czech Republic is a very attractive destination for Indian investment not because of its relatively low costs and high skills within the EU but also because of the huge market opportunities in the union. He said the Ashok Leyland has acquired the Avia Truck Business Unit with the objective of expanding the company's footprint in Europe.
"Ashok Leyland will, within the next few years, increase production volume of the Avia unit, increase the product range and eventually target to achieve the full capacity of over 20,000 vehicles per year," Seshasayee said, adding that 'Avia' which is a respected brand in the Czech Republic will be retained.
S P Hinduja, Chairman of the Hinduja Group, a multi-billion dollar transnational conglomerate, said "The Group is keen to explore investment opportunities in the Czech Republic and Avia truck unit is a first step in that direction".
Hinduja said "the EU which is already the largest trading partner of India, will benefit from further strengthening of its ties with India given the huge growth potential of India."
With six manufacturing locations in India at Chennai, Hosur (three plants), Alwar and Bhandara, Ashok Leyland limited has an annual production capacity of 77,000 vehicles and 87,000 engines.
Ambassador Raghavan, welcoming the Joint Venture said it would pave way for many more investment projects from India to Czech Republic.
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