Ashok Leyland (ALL) has moved a district court near Chennai seeking directions to stop Nissan from using manufacturing equipment installed at the latter’s manufacturing plant at Oragadam near here.
This has further brought into the open, differences between the two firms. Ashok Leyland and Japanese auto giant Nissan Motor have a 51:49 joint venture for LCVs called Ashok Leyland Nissan Vehicles, but trouble has been brewing between the two firms for some time. Ashok Leyland has said that the equipment/tools are its own and for making LCVs under the joint venture, while Nissan was trying to use the same for making cars.
Nissan India spokesperson when contacted said: “We have received the notice from Ashok Leyland and we are contesting it.”
The JV, one of the three between the partners, was set up way back in 2007. Ashok Leyland Nissan Vehicles has been going through a rough patch over the past few quarters as products such as Evalia and Stile (MPVs) failed to garner customer support and had to be phased out last year. The joint venture was set up to make LCVs in the 2.5 tonne to 7.5 tonne ranges under both the brands. Dost, which was the first LCV, is the only product that seems to be doing well, crossing the 1 lakh mark in sales since its launch three years ago.
The JV had to incur a net loss of R791 crore for FY15. Ashok Leyland is said to have had invested R500 crore in the JV. The two companies have two other JVs — Nissan Ashok Leyland Powertrain, the powertrain manufacturing company and Nissan Ashok Leyland Technologies, the technology development company. In November last year, Nissan Ashok Leyland Technologies (NALT) had filed an application with BIFR after it ran up accumulated losses of R172.37 crore.
Ashok Leyland Q3 net up 519%
Riding on a 27% growth in sales of medium and heavy commercial vehicles (M&HCV) Ashok Leyland reported a 519% year on year growth in net profit for the quarter ended December at R198.63 crore. In the corresponding quarter last fiscal it had recorded a net profit R32.09 crore.
The revenue during the quarter grew 22% to R4,085.34 crore. M&HCV sales during the quarter grew to 23,232 units as compared to 18,279 units in the same quarter previous fiscal. In total, including LCVs, the company reported a 22% growth during Q3 to 30,984 units as against 25,424 units in the same quarter previous fiscal.
Vinod K Dasari, managing director, Ashok Leyland Limited, said, “With yet another successful quarter performance, Ashok Leyland is well on the path to sustained profitability.”