In the next year and a half, commercial vehicles major Ashok Leyland will double the workforce at its R&D division to 500.

The company's plans are ambitious with the acquisition of 50 acres of land to set up the division's new R&D centre near Chennai (previously Calcutta).

In 2003-04, the company invested €7 million (INR400 million) in R& but this will quadruple in the next two to three years. Ashok Leyland's R&D expenditure was 1% of its revenue in 2002-03, rose to 1.4 % in 2003-04 and is slated to reach 2 % in 2004.

Ashok Leyland has increased its R&D focus because it wants to become a serious player in the steadily growing multi-axle commercial vehicle segment. The new national budget passed in July 2004 allows tax breaks of 150% on the automotive sector's expenditure on R&. The company is fast expanding and is looking at markets outside India where there is a need for large GVW, multi-axle truck rigs.

The R&D division would also be used by Ashok Leyland's subsidiaries such as Ashley Transport Services, which is a freight management intermediary service.

Deepesh Rathore / Tilak Swarup