Ashok Leyland, Nissan in JV pacts for LCVs, powertrains and technology

26 May 2008

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.