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Ashok Leyland is preparing to launch its first-ever vehicle scrappage facility under a franchise model.
The company has finalised an agreement with Registered Vehicle Scrapping Facility (RVSF). “This places AL in a strategic position on our road to circularity and reducing our environmental footprint,” said the company’s annual report for FY24.
The Hinduja flagship is also developing a digital platform named Re.AL for the used vehicle business. This platform will help customers resell their vehicles in compliance with the government-mandated vehicle scrappage policy.
Ashok Leyland, a leading truck and bus manufacturer, anticipates that the commercial vehicle industry’s growth will be driven by replacement demand, mandatory scrapping of older government vehicles and steady macro-economic growth.
Alternative technologies
Dheeraj Hinduja, Chairman of Ashok Leyland, mentioned in the annual report that the company is preparing to offer a range of products powered by alternative fuel technologies, including battery-powered vehicles, with several such products currently undergoing trials.
It is focusing on alternative technologies such as battery electric, hydrogen ICE, fuel cell, LNG, and CNG. “The company is fully geared to offer clean energy options beyond electric propulsion as well. The CNG and LNG trucks and buses are already operational, initiatives in methanol as a new energy fuel is well underway and the prototype green hydrogen trucks have been deployed in actual operating conditions. In short, Ashok Leyland is future-ready to offer a full suite of clean energy vehicles.
Ashok Leyland is also establishing a significant presence in the green mobility space through its subsidiary Switch Mobility, which focuses on developing and producing electric buses and electric light commercial vehicles.
Currently, over 950 buses are deployed globally, with the order pipeline continually growing. Sales in the European market are planned to begin later this year. Recently, the company launched its Boss electric truck and is in the advanced stages of launching a fully electric 55-tonne tractor-trailer.
“The EV sector is expected to be buoyant from now on enabled by supportive governmental measures,” he said.
With multiple new products across various fuel segments in the pipeline, the company’s R&D spend as a percentage of turnover increased to 1.30 per cent in FY24, up from 1.19 per cent in FY23.
In FY24, Ashok Leyland invested ₹1,525 crore in its mobility arms. After acquiring a 100 per cent stake in OHM Global Mobility Pvt Ltd (OHM India) from OHM International Mobility Ltd, UK, for a nominal consideration of ₹1 lakh, it further invested about ₹300 crore in OHM. The company also invested ₹1,200 crore in Optare Plc., UK, increasing its stake to 92.59 per cent.
Ashok Leyland and TVS Mobility Pvt Ltd formed a joint venture—TVS Trucks and Buses Private Ltd (TVS Trucks)—with the Hinduja flagship investing about ₹25 crore, contributing 49.90 per cent of the paid-up share capital of TVS Trucks.
While advancing new energy technologies, the company is also expanding its range in the traditional ICE segment to fill market gaps. It plans to launch at least half a dozen new products in the light commercial vehicle space this fiscal. “In FY24, more than 30 per cent of sales came from newly launched products,” said Hinduja.
The company’s share closed at ₹234.25 per share, down 1.91 per cent, on BSE on Tuesday.
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