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IRIZAR TVS LIMITED

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Ashok Leyland, Sundaram Industries and Irizar, of Spain, have come together to form Irizar TVS Limited. This joint venture company will manufacture bus bodies in India. With its experience in bus body design and manufacturing, Irizar will provide the technology for manufacturing contemporary bus bodies.

Irizar BusesThe three partners will have equal share-holdings in Irizar TVS Limited. Speaking at a press conference, R. Seshasayee, Managing Director, Ashok Leyland, said that the market for buses is expected to be around 25,000 and is growing at the rate of 3.5 - 5%. Indian customers today are looking for longer life, safe designs (particularly the state transport undertakings) and comfort (this has to be addressed both by chassis builders and body builders).

Irizar BusesSundaram Industries are pioneers in bus body building in India and Irizar is an established bus body builder of international repute. Part of the Mondragon Corporation Cooperativa (MCC) Group, Irizar's turnover is about USD 5,000 million and it has a workforce of more than 42,000. The JV plans to bring out the 'intercentury' brand of buses, that belong to Irizar, in a year's time. This brand has been very successful in Europe recently. Meanwhile, the company will be concentrating on existing Sundaram Industries built bodies. For this purpose, Sundaram Industries will be leasing out its Viralimalai and Pudukottai manufacturing facilities for eight years. Sundaram Industries will also be providing its experienced workforce for this venture.

IrizarAccording to Seshasayee, Ashok Leyland is not in this to make a little bit of 'pocket money', but to reaffirm its commitment and facilitate integration of chassis manufacture and body building. Currently, the tax law in this country is loaded against a chassis manufacturer building bus bodies. Ashok Leyland will have to bear an additional 15% excise duty on the bus body. However this JV, being a separate company, the excise duty is not applicable. Its not merely the design but also the quality of the product that matters in bus body building. This step, Seshasayee described as "another landmark in technological upgradation of product offering from Ashok Leyland".

The company plans to manufacture around 500 buses this year, for both the domestic and export markets. The joint venture currently has an equity capital of Rs 75 lakh, which is expected to increase in future.

Author : Anuradha Sriraman




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