Nissan, Ashok Leyland ink pact on JVs

Chennai, Aug 29: Nissan Motor Company Limited and Ashok Leyland today announced joint ventures for manufacturing and marketing light commercial vehicles (LCVs).

A company release here said the companies signed Heads of Agreement (HoA) for forming three joint ventures supporting the LCV business.

The first stage of the partnership between the companies included development, manufacture and co-operation for distribution of LCVs under Ashok Leyland and Nissan brands.

The JVs detailed in the HoA would cover a vehicle manufacturing company, powertrain manufacturing company and a technology development company The vehicle manufacturing company would have exclusive rights to manufacture LCV products in India for both the partners.Manufacturing facilities will be located in India and the company majority owned by Ashok Leyland.

In the medium term, production volume (for Indian and export markets) was expected to be above one lakh units annually.

The powertrain manufacturing company would be responsible for the manufacture and assembly of engines and other drive train components to be fitted in the LCVs and for exports. Manufacturing facilities would be located in India and the company majority owned by Nissan.

The technology development company would be responsible for the development of LCVs and related powertrains destined for Indian and identified emerging markets.

The products developed by this 50:50 JV will be sold under both the Ashok Leyland and Nissan brands.

In addition, the two partners were also looking for co-operation in sales and distribution, including providing Nissan access to Ashok Leyland's dealer network in India and for Ashok Leyland to use Nissan dealer networks in identified export markets outside India.

Following the inking of the HoA, both companies will now embark on a detailed feasibility study covering all proposed areas of co-operation.

This study will lead to the signing of a Memorandum of Understanding (MoU) and subsequent formation of legal partnership.

The study was expected to conclude by October 2007.

UNI