Ashok Leyland buys Nissan’s LCV business, existing products to continue

Ashok Leyland has acquired the LCV (Light Commercial Vehicle) business from Nissan Motor Co and now owns 100 % of the LCV business.

By: | Updated: November 25, 2016 4:28 PM
Ashok Leyland Dost Ashok Leyland Dost

Ashok Leyland has acquired the LCV (Light Commercial Vehicle) business from Nissan Motor Co and now owns 100 % of the LCV business. Hinduja Group's flagship company acquired the stake of Nissan in three joint-ventures – Ashok Leyland Nissan-Vehicles Limited, Nissan-Ashok Leyland Powertrain Limited and Nissan-Ashok Leyland Technologies Limited. The acquisition doesn't come as a surprise since a formal announcement was made in September, 2016, wherein the companies had reached upon an agreement for the transfer of Nissan's share in the joint-ventures to Ashok Leyland.

All statutory approvals for this deal are already in place and the acquisition was carried out at a cost of Rs 3 per share for all the three joint-ventures. Post acquisition, Ashok Leyland will continue to manufacture the Dost, Mitr and Partner LCVs, which are based on the design and technology from Nissan. The manufacturing will be carried out under a licensing agreement, while servicing and spare parts availability will be carried out on the back of a technical support arragement. The companies have also agreed upon continuing with a deal to ship made in India parts to Nissan in Japan.

Vinod K. Dasari, Chief Executive Officer and Managing Director, Ashok Leyland, said, “This is an important milestone in the history of Ashok Leyland. We are very positive on the future of the LCV business which is growing. While we have acquired 100% ownership of the JVs, we will continue to be associated with Nissan for the technology of the existing Dost, Partner, and Mitr models. These are very important products for us and hold tremendous potential both within and outside India. Our association with Nissan continues in a new relationship.”

This deal now gives Ashok Leyland complete control of the LCV business, which should help the company expand its presence in the segment. The LCV space has witnessed a lot of action in the past few years with the introduction of new players. If Ashok Leyland can ensure a smooth servicing and spare parts availability for its consumers along with timely introduction of new models catering to market needs, this move should go a long way in expanding the company's share in the LCV space.