Ashok Leyland gets nod for production of defence vehicles

However, instead of completely denying the commercial vehicle major to enter into defence manufacturing sector, the government asked the company to come up with another presentation to the Ministry of Defence. In response Ashok Leyland came up with a proposal in July to manufacture such vehicles through its subsidiary which followed the FDI cap regulations.

Ashok Leyland owns only 24.32 per cent equity of ACCL out of the Rs 5.8 crore paid up equity capital, which is very much according to stipulated norms. But another 33.22 per cent is owned by Ashley Holdings and 30.63 per cent of ACCL is owned by Ashley Investments Ltd, both again, part of Ashok Leyland group, while ACCL’s joint venture partner Tamil Nadu Industrial Development Corporation (TIDCO) has only 8.10 per cent holding in the company.

Thus, Ashok Leyland has technically managed to stay within the guidelines.

Ashok Leyland proposes to make 1,000 such vehicles every year by assembling imported SKD and CKD kits through ACCL, which was established in 1987 by Ashok Leyland and TIDCO, a state government undertaking.

According to sources, ACCL is also in discussion with two world renowned personal carrier and military vehicle manufacturers for technology collaboration. At present, Tata Motors and Vectra from Czech Republic are also in the fray to manufacture light armoured vehicles.

Before this, the government has also approved proposals of Larsen & Toubro and Mahindra & Mahindra to manufacture light armoured vehicles, however, no orders have been placed with any of the private players. A global tender was floated last year, but the process could not

be completed.