Kenya’s Cabinet Secretary for industrialization Adan Mohamed has confirmed on his official twitter account that Indian automobile manufacturing company, Ashok Leyland will establish its first African assembly plant in Kenya in a bid to boost its presence in the region.
Ashok Leyland is planning to establish an assembly plant in Kenya following engagement with their leaders in India. pic.twitter.com/65UNxxhre1
— Adan Mohamed (@AdanMohamedCS) January 16, 2017
This comes after President Uhuru Kenyatta’s state visit to India where several business agreements between the two countries were signed.
In July last year, there were reports in the media that Ashok Leyland was planning to set up a $15 Million local assembly plant with an annual capacity of 1,200 buses. The reports further noted that the Kenyan plant would serve the neighbouring countries while catering to local demand.
“We are looking to set up 2-3 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,”Ashok Leyland Senior Vice President, Thyagarajan Venkataraman was then quoted by India’s Livemint News.
He added that cheap labour, tax benefits and savings on logistics cost are primary drivers for establishing the local assembly unit which is likely to start with buses and assembling trucks later. The company has been securing strong orders for buses from African nations.
Ashok Leyland is India’s second largest commercial vehicle manufacturer, 4th largest manufacturer of buses in the world and 16th largest manufacturer of trucks globally. Operating six plants, Ashok Leyland also makes spare parts and engines for industrial and marine applications. It sells about 60,000 vehicles and about 7,000 engines annually. The company claims to carry more than 60 million passengers a day, more people than the entire Indian rail network.