Hinduja group owned Commercial vehicles manufacturer, Ashok Leyland has announced various measures to tackle situation caused under the impact of global slowdown, including reshaping of its investment plans from Rs 3,200-3,300 crore to Rs 2,000 crore, cost cutting measures, salary cut and retrenchment in some segments.

The firm has announced 20 per cent reduction in salaries, in a bid to reduce expenditures under recessionary environment and significant decline in sales of auto sector. The company expects a saving of about Rs 50 crore through austerity measures, 300-400 basis point improvement in price by negotiating suppliers to cut costs and significant respite by cutting productions and salaries.

Chief financial officer, Ashok Leyland, K Sridharan said that worst is over in auto sector and market would take at least six months to restore. However, he said that firm would remain under pressure till next few months, prompting it to take some hard measures in order to achieve earning target of 10 percent before interest, taxes, depreciation and amortization (EBITDA) margin for next financial year.

Hoping speedy improvement in market conditions, Mr. Shridharan said, "The growth will mainly driven by the government spending on infrastructure projects, including construction of new roads, bridges and on the public transportation system. These would give boost to the commercial vehicle industry,"