Truck major Ashok Leyland Ltd has announced on Monday the legal formation of three joint venture companies with Nissan Motor Company for light commercial vehicle (LCV) business in India, including manufacturing vehicles, powertrain and technology R&D. This legal formation follows the signing of master cooperation agreement (MCA) entered into between the two companies in October 2007.
As per the agreements, both the companies have finalised the shareholding structure of three different JVs. ALL will hold 51% stake in Ashok Leyland Nissan Vehicles Private Ltd, 49% stake in Nissan Ashok Leyland Powertrain Private Ltd and 50% stake in Nissan Ashok Leyland Technologies Private Ltd. While Ashok Leyland Nissan Vehicles will focus on manufacturing LCVs; Nissan Ashok Leyland Powertrain and Nissan Ashok Leyland Technologies will focus on powertrain manufacturing and technology developmental activities, respectively, said Ashok Leyland here on Monday.
The aggregate investment in all three companies will be around Rs 2,300 crore ($575 million). The enterprise will involve a capacity of 100,000 vehicles in the first phase which will be scaled up subsequently. The plant is expected to start production from 2010-11. Among the three platforms identified covering applications upto 7.5 tonne gross vehicle weight (GVW) is an all-new generation Nissan Altas F24 light-duty truck. In addition, an all-new engine is being developed specifically for LCV applications as part of Euro III and IV compliant diesel engines.
According to R Seshasayee, managing director, ALL, “The current growth plans of ALL involve not only our stated capacity additions and new product launches, but also with this important step (our entry into the fast-growing LCV segment). The balanced JV structure facilitates meaningful contribution from both partners and the best opportunity to leverage respective strengths.”
Carlos Tavares, executive vice-president, Nissan Motor, said: “We made another important step in the creation of a solid structure that will allow Nissan and ALL to enter successfully the LCV market in India and global markets. This represents an important embedded element in our new Nissan GT 2012 plan based on growth and trust.”
Recently Ashok Leyland has announced its Rs 3,000 crore investment into new engine plant at Uttarkhand, capacity expansion of existing plants and introduction of new products during current fiscal.