| Ashok Leyland of India and Nissan
have agreed to form three joint venture companies to develop, make and
sell light commercial vehicles (LCVs).
The three joint venture companies are:
• A vehicle manufacturing company with exclusive rights to manufacture
LCV products in India for both partners. The manufacturing will be in
India and the company will be majority owned by Ashok Leyland. In the
medium term, production volume (for Indian and export markets) is expected
to be more than 100,000 units a year.
• A powertrain manufacturing company to be responsible for the manufacture
and assembly of engines and other drivetrain components to be fitted in
the LCV products and for exports. Manufacturing will be located in India
and the company will be majority owned by Nissan.
• A technology development company to be responsible for the development
of LCV products and related powertrains, destined for the Indian and identified
emerging markets. This JV company will be owned 50:50 by the two partners.
The products developed will be sold under both Ashok Leyland and Nissan
brands.
In addition, the two partners are studying cooperation in sales and distribution.
This includes providing access for Nissan to Ashok Leyland’s dealer
network in India and for Ashok Leyland to use Nissan dealer networks in
some export markets outside India.
Dheeraj G Hinduja, co-chairman of Ashok Leyland, said: “Possibilities
are immense for a win-win collaboration by bringing together Nissan’s
tradition of engineering excellence with Ashok Leyland’s intimate
knowledge of the market and cost efficient value addition in India.”
Carlos Ghosn, Nissan president and CEO, said: “Our LCV business
and overall expansion into India represents two of the biggest growth
opportunities for Nissan in the medium and long term. Following previous
announcements relating to expanding our passenger car business in India,
this latest investment will broaden our coverage of this market in addition
to providing new LCV products for emerging markets. In this regard, we
very much look forward to the partnership with Ashok Leyland.”
Following the signing of the heads of agreement, the companies will do
a detailed feasibility study covering all proposed areas of cooperation.
This will lead to the signing of a memorandum of understanding and the
subsequent formation of the legal partnership. This study is expected
to conclude by October 2007.
Ashok Leyland is part of the Hinduja Group and a manufacturer of commercial
vehicles in India with 06-07 sales turnover of more than US $2 billion.
With six manufacturing locations at Chennai, Hosur (three plants), Alwar
and Bhandara, the company has an annual production capacity of 84,000
vehicles which is being enhanced to 100,000 in the current year. The company
has associate companies in the Czech Republic and the UAE and joint ventures
in Sri Lanka and Bangladesh, and also exports to over 20 countries worldwide.
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