Commercial vehicle major Ashok Leyland Ltd has signed three separate joint venture agreements with Nissan Motor Co of Japan for development, manufacture and sale of light commercial vehicles and powertrains.
The joint ventures, involving a total investment of around Rs2,300 crore ($575 million), will also develop new technology.
The current agreement is in pursuance of a master cooperation agreement the two companies signed in October last, Ashok Leyland informed the Bombay Stock Exchange (BSE) in a statutory filing.
The joint venture for manufacturing vehicles, Ashok Leyland Nissan Vehicles Pvt Ltd, will be 51 per cent owned by Ashok Leyland and 49 per cent by Nissan.
The powertrain JV, Nissan Ashok Leyland Powertrain Pvt Ltd, will be 51 per cent owned by Nissan and 49 per cent by Ashok Leyland, while the technology venture, Nissan Ashok Leyland Technologies Pvt Ltd, will be a 50:50 company.
The LCV joint venture, with a planned capacity of 100,000 vehicles in the first phase, will be scaled up subsequently. The plant, to be set up at Chennai, is expected to start production from 2010-11.
The vehicles to be produced include a new-generation Nissan Atlas F24 light-duty truck, which has a gross vehicle weight of up to 7.5 tonnes.
A new engine will also be developed for LCV applications, as part of the range of Euro-3 and Euro-4 compliant diesel engines, the companies said in a joint statement.
''The balanced joint venture structure facilitates meaningful contribution from both partners and the best opportunity to leverage their respective strengths,'' said R Seshasayee, managing director of Ashok Leyland.
''We made another important step in the creation of a solid structure that will allow Nissan and Ashok Leyland to enter successfully the LCV market in India and global markets,'' added Nissan executive vice-president Carlos Tavares.
Nissan plans to roll out 13 LCV models bay 2012, as part of its global strategy. The company, which is planning to emerge as a major LCV manufacturer, hopes to double its revenue from LCV sales by 2012.