The Chennai-based automaker said in a regulatory filing that a continuing general economic uncertainty in the British bus industry and consequent inability to derive “benefits of scale” prompted the move. A slower-than-expected transition to EVs in public transport also influenced the decision.
The board of Ashok Leyland on Wednesday approved commencement of consultation process with the affected employees of Switch UK which “could potentially lead to cessation of its manufacturing and assembly activities at its Sherburn facility,” it said.
The company plans to start catering to the UK and European markets when it recovers, from Ashok Leyland’s alternate manufacturing sites in India and the UAE.
Meanwhile, Switch’s subsidiary in India is planning to double down on the country’s fast-growing electric vehicle market, which is poised to grow manifold in the next few years.
The EV bus market in India is doing “exceptionally well.” Switch India is likely to achieve Ebitda breakeven in FY25, and is hoping to grow volumes threefold in the next fiscal year on the back of orders for more than 1800 electric buses, said Shenu Agarwal, MD & CEO, Ashok Leyland, in the statement. In e-LCVs, within the 2-3.5T segment, the company has an over 80% market share, with prospects of 50-80% volume growth in FY26, he said.Ashok Leyland emphasised that Switch UK has no plan to exit the UK market. It will execute and complete all the orders on hand and will continue to provide aftermarket and service support from two other facilities in Rotherham and Thurrock for in-use vehicles.“The current cash flow requirements of Switch UK will be borne out of GBP45 million of equity infusion already approved by the Board of Ashok Leyland in February this year,” said K M Balaji, chief financial officer, Ashok Leyland. Switch India is doing much better than expected and should not require significant equity infusion in near future, he added.
On an overall basis, the value accretion from Switch’s EV business is expected to be much more than investments made in these entities, he noted.
