Ashok Leyland to Open a Manufacturing Plant in Kenya

Ashok Leyland, which is the second biggest trucks and buses maker in India is planning to set up a 1-billion-shilling bus manufacturing plant in Kenya later this year.

The bus factory will be one of its kind and the first one in Africa. Ashok Leyland takes the fourth biggest bus manufacturing factory in the world. The company will be setting up a bus assembly plant in Kenya through a wholly-owned subsidiary. This plant will have an annual capacity of 1,200 buses.

The plant will serve as an export hub in the neighboring countries as well as serving the increasing demand in the Kenyan market. The African markets are at present being addressed mostly by Chinese player therefore Ashok Leyland has a strong potential to establish its presence with its new range of cost-competitive trucks and buses.

Ashok Leyland chief financial officer Gopal Mahadevan said the Kenya base would enable the auto maker entrench a foothold in the Kenyan truck market currently dominated by the Chinese.

This comes about after Volkswagen opened up a manufacturing plant in Thika last month. This was the third production company in Africa, and the first one in Kenya, after South Africa and Nigeria. The company stated that the plant will create employment and help improve the Kenyan economy.

The Ashok Leyland brand is currently being assembled through local assembler Kenya Vehicle Manufacturer (KVM). KVM is owned 35 percent by the government and 32.5 percent each by DT Dobie and CMC Holdings.

The Kenyan market is estimated to account for 4,000 units of truck sales each year and is expected to double in the next few years.

There has been a rising demand for commercial vehicles and luxury cars in Kenya which pushed new and used motor-vehicle registrations in Kenya to more than 100,000 units last year, according to the Kenya National Bureau of Statistics.

Related: Volkswagen Launches its Manufacturing Company in Kenya