Leyland to set up Sh500m trucks and buses assembly plant in Kenya

Indian automaker Ashok Leyland is looking to set up a Sh500 million trucks and buses assembly plant in Kenya, joining the rapidly expanding commercial vehicles market.

Several India media outlets have quoted the company’s Chief Financial Officer Gopal Mahadevan announcing the plan to set up three assembly plants in Africa, with Kenya being one of the prime targets.

Ashok Leyland becomes the latest global manufacturer eyeing Kenya.

Toyota and Chinese automaker Foton started assembling their vehicles locally in 2013.

“We’re looking to set up two to three assembly sites in Africa. We are devising East African and West Africa strategies and we have short-listed Kenya as a possible market for setting up our first assembly unit,” Mr Mahadevan was quoted saying by The Hindu.

The plan will see Ashok Leyland seek a local partner to develop the plant with. The company will then ship in complete knock-down kits to be assembled to full units and sold in Kenya and regionally.

It is expected that the company will start with assembling buses, with the trucks assembly line coming on later.

Ashok Leyland trucks and buses are currently distributed in the country by TruckMart East Africa. Mr Mahadevan said that a lot of trucks in Africa are supplied by Chinese manufacturers, adding that they will be offering “quality products at competitive prices.”

The African operations will be headquartered in the Middle East. Cities in the East African region are phasing out small public transport vehicles in favour of high capacity buses, further deepening the market.

The region is also pouring billions of shillings into infrastructural development which provides a good market for trucks.

Earlier this month, German motor vehicle manufacturer Daimler AG opened an office in Nairobi aiming to use it as an entry to East, Central and West Africa’s truck and bus market.

The office will manage sales and customer service of both Mercedes-Benz and FUSO brands in 41 markets in the region.

Daimler has the biggest market share in Kenya’s heavy commercial trucks business, selling about 500 units of Mercedes Actros prime movers last year.

India’s largest automaker, Tata, last month opened two new dealerships — one targeting farmers in Narok with tractors and another in Ruiru to sell heavy commercial vehicles such as tippers, prime movers and concrete mixers.

Tata Kenya sold 1,210 vehicles last year, out of the total 19,966 (or 6.1 per cent of total sales), according to statistics from the Kenya Motor Industry Association.