With the economic slowdown being a hindrance to volume growth, India's third largest heavy commercial vehicle manufacturer, AMW Motors has scrapped its stake dilution plan, which was to fund company’s future expansion.
The Mumbai-based company was exploring the option of selling a minor stake to private equity players to raise up to $150 million.
“Few years back we saw a tremendous growth in the segment, which made us to think about raising funds through various options, including selling stake to a PE player, to fund our expansion plan. Given the slowdown, we do not think we have to carry out such an expansion in the near future,” Aniruddh Bhuwalka, manging director of AMW Motors told Business Standard.
The company, which overtook players like Volvo, Eicher as the third-largest heavy truck maker, had recorded a growth of about 60 per cent in 2010-11 clocking a sales of around 10,000 units. However, in the current fiscal, the company has so far sold around 5,000 units. “The overall market likely to see a 30-35 per cent drop in volumes. We will hopefully do to slightly better and may post 20 per cent drop in sales,” he said.
Citing that the company’s plant at Bhuj (Gujarat) has a capacity of 50,000 units, Bhuwalka said, “The company would not need fresh investment in near future.”
Also, the company’s foray into luxury bus segment has been put on backburner. “We have kept that on hold. We are waiting the market to revive,” he said. AMW Motors had earlier showcased a luxury bus model at Auto Ex[po 2012, which was to be launched in the current year.
The company had started commercial production in 2008 and currently offers trucks ranging from 16 to 49 tons. With the introduction of 25 tonnes tipper and 49 tonner tractor trailer, AMW Motors is likely to be a full range player in 16 to 49 tonne category by the end of the year.