ANG Auto managing director Premjit Singh (left) with Ashok Leyland chief operating officer Vinod Dasari in New Delhi on Tuesday. (AFP)

New Delhi, July 18: Bus and truck major Ashok Leyland today placed a five-year order for tractor-trailers with ANG Auto Ltd.

The Rs 1,800-crore order will be executed by ANG subsidiary ANG Auto Tech.

Under the deal, ANG Auto will set up a unit with a capacity to manufacture 6,000 trailers per annum for Ashok Leyland at its Sitarganj plant in Uttaranchal, which will be operational by October.

ANG Auto will hold around 75 per cent equity in the new subsidiary and manufacture trailers in collaboration with FUWA Engineering of China, a manufacturer of axles.

The tie-up can be renewed after five years with a mutual consent.

ANG Auto, which makes trailer axles, transmission and air-brake components, will invest up to Rs 61 crore in the new unit.

“Of this, Rs 25 crore will be invested in the first phase to build up a capacity of 3,000 trailers,” said Premjit Singh, managing director, ANG Auto Ltd.

“The biggest advantage is that the customer will not have to wait for months to get Ashok Leyland-branded, fully-built tractor trailers,” said Vinod Dasari, chief operating officer of Ashok Leyland.

Ashok Leyland may consider picking up a stake in the ANG subsidiary “at a later stage”, he added.

ANG Auto is also open to sharing equity with the Ashok Leyland group, Singh said.

ANG Auto, a component manufacturing company, clocked a revenue of Rs 57 crore last fiscal with as much as 85 per cent contribution coming from its overseas sales.

It has recently consolidated group companies and is targeting a Rs 130-crore revenue this fiscal.

Meanwhile, Ashok Leyland reported an income of Rs 6,053 crore and a net profit of Rs 327 crore in fiscal 2006.

This is against an income of Rs 4,810 crore and profit of Rs 271 crore it clocked in 2005-06.

The company sold 61,655 vehicles last fiscal against 54,740 units in the previous year.