Ashok Leyland steps up global play with Indonesian JV unit, Saudi plant

Chennai: Ashok Leyland is accelerating its global expansion with plans to establish a new assembly facility in Saudi Arabia and forge a strategic partnership in Indonesia, as the Hinduja flagship looks to tap growing demand for conventional, electric, and defence vehicles in emerging markets.The Indian commercial vehicle major is collaborating with Indonesia's state-owned PT Pindad to jointly develop electric buses and defence vehicles for the local market, marking its entry into one of ASEAN's largest automotive markets, where Japanese manufacturers currently dominate.
"We have just signed this MoU, and the intention is to establish a much larger presence in the Indonesian market. It is a large and promising market, and this opportunity allows us to focus not only on electric buses but also on defence products," said Dheeraj Hinduja, chairman, Ashok Leyland (AL).AL was not present in Indonesia earlier and believes that working with a local partner will provide a strategic advantage. "This collaboration opens up a new market for us," he said, adding, "The final structure of the collaboration, including equity participation and manufacturing plans, is still being finalised."In the Middle East, Ashok Leyland is setting up an assembly facility in Saudi Arabia through its UAE-based subsidiary to meet strong regional demand and improve cost competitiveness. The move comes as its existing Ras Al Khaimah plant in the UAE has exceeded its rated capacity of 6,000 units per year."As far as utilisation of our Ras Al Khaimah plant is concerned, we have already crossed the 100% utilisation level. We expect to sell around 7,000–8,000 vehicles this year, and demand is about 30%–40% higher than current capacity," said K M Balaji, CFO, Ashok Leyland.The Saudi facility will be an assembly unit and will primarily cater to domestic demand. Local assembly will help the company avoid about 7.5% customs duty on vehicles exported from the UAE. The undisclosed investment will be funded by the UAE arm through internal accruals and borrowings."This will also help reduce costs, as vehicles shipped from Ras Al Khaimah to Saudi Arabia currently attract customs duty. Local assembly will also help us qualify as a preferred supplier for government procurement in Saudi Arabia, where demand is expected to be strong," he said.Alongside its global expansion, Ashok Leyland is strengthening its EV business, earmarking Rs 600 crore for OHM, which provides e-mobility-as-a-service (eMaaS) — Rs 300 crore has already been infused, and the remaining Rs 300 crore has been approved for phased deployment based on business needs.On Wednesday, the company reported a strong performance for Q3 FY26. Its net profit rose to Rs 796 crore, the highest-ever quarterly profit, up 4% from the year-ago period, after accounting for a one-time charge of Rs 308 crore towards the new Labour Code. Revenue also reached a record Rs 11,534 crore, compared with Rs 9,479 crore in the year-ago period, driven by strong double-digit growth across segments.