Lanka Ashok Leyland charges ahead with electric buses and export push

By Nishell Fernando

Lanka Ashok Leyland PLC (LAL) is poised for a new era of growth, announcing ambitious plans to launch a full range of electric buses and commence exports, with the first consignment already delivered to the Maldives. 

The company’s strategy, detailed in its 2024/2025 annual report, signals a significant move towards sustainable transportation and international market expansion, despite a challenging economic environment.

LAL is set to introduce an entire range of electric buses under the ‘SWITCH’ brand, a move that aligns with the Sri Lankan government’s focus on public sector electrification. This initiative follows the successful introduction of an electric variant of its light truck model, DOST, marking the company’s first step towards an electric portfolio. The company sees the government’s push for electrification as a favourable condition for this new venture.

In a significant step towards becoming a regional player, LAL has initiated export operations, with the first delivery of vehicles to the Maldives. The company is also exploring market opportunities in right-hand drive countries across Africa. While still in its early stages, the company views exports as a crucial component of its long-term growth strategy.

The company also highlighted the introduction of the Luxura Super Luxury AC Bus, designed to cater to the growing demand for high-end travel solutions from private operators, tourism providers and public transport agencies.

The outlook for the commercial transport sector in Sri Lanka remains positive, buoyed by a recovering economy, increasing infrastructure investments and easing interest rates. LAL, with its dominant position in the bus segment and an expanding presence in light and heavy trucks, is strategically positioned to capitalise on these trends. The company’s investment in its workforce and capacity expansion during the recent economic downturn has ensured its readiness to meet the growing demand in public transport, tourism and commercial logistics.

The partial lifting of vehicle import restrictions in December 2024 is seen as a turning point for the industry, expected to stabilise product availability and revive demand. LAL plans to leverage this through a dual strategy of strengthening domestic assembly and capitalising on renewed import opportunities.

Despite the positive outlook, LAL acknowledges several challenges. Supply chain disruptions, currency fluctuations and rising input costs remain significant concerns. The company is also navigating foreign exchange volatility, high borrowing costs and an evolving regulatory framework. To mitigate these risks, LAL is focused on strengthening local assembly, optimising financial resources and enhancing operational resilience.

LAL continues to focus on increasing local value addition, with local content now accounting for nearly 40 percent of production costs through partnerships with ancillary suppliers. The company is the only assembler of heavy commercial vehicles in Sri Lanka. LAL is also committed to skill development through its in-house training centre, offering NVQ Level 04 certification programmes to over 200 students. The company also highlighted its unique all-female assembly line as an example of its commitment to inclusion and empowerment.

Lanka Ashok Leyland PLC is a joint venture company with a diverse ownership structure. Lanka Leyland (Pvt.) Limited (government of Sri Lanka) holds a 41.77 percent stake while Ashok Leyland Limited (India) holds 27.85 percent of the share capital. Ashok Leyland Limited is an Indian multinational automotive manufacturer primarily owned by Hinduja Group.