Ashok Leyland Ltd (ALL), the flagship of the Hinduja Group, and John Deere Construction & Forestry Company have announced on Monday the completion of all legal formalities for the formation of the joint venture company ? Ashok Leyland John Deere Construction Equipment Pvt Ltd.
The definitive agreement to form the 50:50 JV was first announced in September 2008. The company formed will initially manufacture backhoes and wheel loaders and will market them, along with excavators, in India and abroad.
The range will subsequently be expanded to include a full line of construction equipment. Pilot production will commence, as scheduled, from October 2010 and serial production by January 2011 at a manufacturing facility to be situated near Chennai.
As the second largest commercial vehicle manufacturer in the country, Ashok Leyland brings to the table its expertise and broad, pan-India distribution network while John Deere will provide its technical know-how and vast experience in the construction equipment business. John Deere is the world’s largest manufacturer of equipment for agriculture and forestry and a major supplier for construction and lawn and turf care.
The $2.5 billion Indian construction equipment industry has been on a growth trajectory and envisages 20% year-on-year growth over the next 5 years. This new range of construction equipment will complement Ashok
Leyland?s range of commercial vehicles like tippers, cement bulkers and tip-trailers, underscoring the close synergies that exist between the two businesses, ALL said in a statement here.