While Nissan's Leyland JV has hit a roadblock after eight years of togetherness, its much-publicised proposed partnership with Bajaj Auto to make ultra-low cost cars could never take off and had to be shelved eventually.
When it comes to joint ventures, India has again proved to be a difficult terrain for Japan’s $100-billion auto giant Nissan, with partner Ashok Leyland dragging it to court alleging violation of local licensing conditions and breach of partnership agreement.
While Nissan’s Leyland JV has hit a roadblock after eight years of togetherness, its much-publicised proposed partnership with Bajaj Auto to make ultra-low cost cars could never take off and had to be shelved eventually.
Besides, Nissan’s global alliance partner Renault also had to face partnership blues in India when its tie-up with Mahindra and Mahindra ran into rough weather and the Indian auto giant bought out the foreign partner from their JV here.
Another tie-up that broke in India was Nissan’s marketing partnership with Hover Automotive, which was promoted as a master franchise concept in the country and ended up as yet another unravelling of various partnerships sewed or proposed by Renault-Nissan’s global chief Carlos Ghosn, who has always been known to be bullish on the India growth story.
When asked about numerous JV failures, Nissan India put up a brave face and said that its “joint ventures with Ashok Leyland are the only joint ventures Nissan have in India” and the assumption that it had multiple JVs was incorrect.
“The alliance between Nissan and Renault is the most enduring and successful in the history of the auto industry. Our growth worldwide has been has built on long-term partnerships.
“In case of Ashok Leyland, we are disappointed they walked away from negotiations and took the most serious option of legal action, which we maintain is unwarranted. Nissan wants an amicable solution so we can concentrate on building great vehicles for our customers,” a Nissan India spokesperson told PTI in reply to queries about problems with the JVs.
While an Ashok Leyland spokesperson declined to comment on queries regarding the problems in the company’s partnership with Nissan, the tie-up is headed for a break-up with both the sides having served notices and counter-notices to each other.
The Indian partner has dragged Renault Nissan Automotive India Pvt Ltd (RNAIPL) to the court over alleged violations of contract agreement and flouting of Export Promotion Capital Goods (EPCG) scheme regulations.
In May 2008, Ashok Leyland and Nissan had formed three JVs — Ashok Leyland Nissan Vehicles Ltd (ALNVL) for vehicles manufacturing, Nissan Ashok Leyland Power Train Ltd (NALPT) for making power trains, and a technology JV Nissan Ashok Leyland Technologies Ltd (NALT).
The partners have invested about Rs 1,000 crore as equity between then.
Adding to the troubled relations, Nissan has served a termination notice for the technology joint venture and the differences continue to grow between the partners.
Ashok Leyland, a 51 per cent shareholder in its joint venture with Japan’s Nissan Motor, has filed the suit to “protect and safeguard the interest” of the JV company, Ashok Leyland Nissan Vehicles Ltd, saying it was not getting the necessary cooperation from the members of the board representing the remaining 49 per cent shareholding.
Ashok Leyland is engaged in the business of manufacturing and selling commercial vehicles for the last 65 years and had a turnover of USD 2.2 billion in 2014-15 with present across 50 countries.