Hinduja Group’s commercial vehicle manufacturer, Ashok Leyland, has completed an investment of GBP 45 million (approximately Rs 500 crore) into its UK subsidiary, Optare Plc, which is the holding company of Switch Mobility. This transaction increased Ashok Leyland’s stake in the Yorkshire-based bus manufacturer by 0.41%, bringing its total ownership to 93%. The company informed stock exchanges on 2 April.
In its filing, the company said that the Board of Directors of Optare Plc, at their meeting on 1 April 2025, approved the allotment of 64,963,55,352 ordinary shares of £0.001 each at an issue price of £0.006927 per share (including a premium of £0.005927 per share) to the company.
Previously, Ashok Leyland had announced its intention to invest Rs 500 crore into Optare to meet capital expenditure requirements. Optare serves as the parent entity for both Switch UK and Switch India, with a portion of the investment expected to be allocated to the Indian arm.
Shenu Agarwal, Managing Director and CEO of Ashok Leyland, said that as this investment is directed into Optare, part of it will be utilized by Switch UK, while some may flow into Switch India for capex needs. The funds are intended to reduce Switch UK’s interest burden and support its capital expansion plans.
Switch UK has been grappling with low sales volumes, leading to revenue fluctuations. In response, Ashok Leyland recently announced the closure of one of its manufacturing and assembly operations at the Sherburn facility in the UK.
According to Agarwal, inconsistent order inflow is a major challenge for Switch UK, causing periods of both underutilization and overcapacity at its factory.
As of February 2025, electric buses, including battery-electric and plug-in hybrid models, account for 15.9% of new bus sales in the European Union, while diesel-powered buses dominate at over 62%. Overall, electric vehicles make up just 1.9% of the EU’s total bus fleet, according to data from the European Automobile Manufacturers’ Association (ACEA). The sluggish demand in the public transport sector, where Switch UK operates, is primarily attributed to high upfront costs, range anxiety, and inadequate charging infrastructure.
Buses and coaches handle only about 7.3% of passenger transport on EU roads, ACEA reported. “EV market is still kind of very, very subdued in UK against our expectations 2-3 years ago. So, we are evaluating the options for Switch UK because there we are making losses,” Agarwal stated in February 2025.
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