Closure of the Switch Mobility bus manufacturing plant in Sherburn in Elmet looks inevitable after parent Ashok Leyland announced that it will commence a consultation on that move.
Ashok says that the proposal has come about thanks to “general economic uncertainty in both the UK and Europe.” If the closure progresses, all orders in hand will be completed and aftermarket support for existing vehicles will be maintained.
The manufacturer came out of Optare and saw the Switch Mobility moniker adopted for battery-electric buses. It says that “when markets recover” it will continue to cater to UK and other European demand from plants in India and the United Arab Emirates.
The e1 heavyweight battery-electric single-decker was launched in 2022 for left-hand drive European nations but has struggled to gain traction in a highly competitive market.
Ashok adds that it plans to “double down on the high-growth India EV market, which is poised to grow multi-fold in the next few years.” Switch has over 1,800 battery-electric bus orders for the Indian market. It also offers zero-emission light commercial vehicles there.
Speaking about the Sherburn closure proposals, Ashok Leyland Managing Director and CEO Shenu Agarwal says: “While Ashok Leyland remained committed to the UK market over the last 15 years, adoption of zero-emission passenger vehicles has been tepid. This seems to be the right time to cut down losses in the UK market.”
Chief Financial Officer K M Balaji adds that potential closure of the Sherburn in Elmet plant by Switch Mobility “is expected to mitigate the losses of UK operations.”
He continues: “The current cash flow requirements of Switch UK will be borne out of GBP 45 million of equity infusion already approved by the board of Ashok Leyland in February this year.
“Switch India is doing much better than expected and should not require significant equity infusion in the near future. On an overall basis, the value accretion from Switch EV business is expected to be much more than the investments made in those entities.”
The most recent accounts for Switch Mobility, to 31 March 2024 and including all group operations, show a loss of ÂŁ43.4 million on a turnover of ÂŁ66.6 million, with the latter figure representing an almost trebling from the previous financial year. In FY2023/24, the UK accounted for ÂŁ24.9 million of turnover but that from the rest of Europe was just ÂŁ117,000.
In 2022, then-Switch CEO and Executive Vice Chairman Dr Andy Palmer said that it had ceased the manufacture of diesel buses at Sherburn in Elmet. That was subsequently reversed to permit assembly of the diesel Optare Solo with a major order from Stagecoach.
Delivery of the diesel Solo to Stagecoach and at least one other customer has continued, but uptake of Switch-branded battery-electric bus models here has been slow and hurt by competition from other marques.
