Ashok Leyland, Nissan in joint venture pact to introduce light commercial vehicles in India

29 October 2007

The agreement was signed in Chennai today by R. Seshasayee, managing director of Ashok Leyland and Carlos Ghosn, president and CEO of Nissan Motor Co., Ltd.

This agreement follows the signing of the heads of agreement (HoA) document in August and reflects progress achieved with the detailed project evaluation. The partnership will include the development and manufacture of LCV products under both the Ashok Leyland and Nissan brands as well as cooperation in sales.

"The LCV business is one of Nissan''s most important global growth engines," said Carlos Ghosn, president and CEO, Nissan."This agreement accelerates our LCV business in India and lays the foundation for further growth through exports. Ashok Leyland shares our vision of a successful win-win partnership, where both companies are focused on value generation for all stakeholders. We see India emerging as an important hub in Nissan''s global LCV manufacturing footprint."

The two companies say the projects would require an investment of around $500 million for the creation of three joint venture companies in the following three automotive businesses:

A vehicle manufacturing company to manufacture LCVs in India for the two companies, which would be owned 51 per cent by Ashok Leyland and 49 per cent by Nissan. Production will start in 2010 and will include the new generation Nissan Atlas F24 light-duty truck, in addition to a range of products covering applications from 2.5 to 8 ton gross vehicle weight (GVW). In the medium term, production volume, intended for both Indian and export markets, is expected to grow beyond 100,000 units annually.

"With the launch of our first product in 2010 we will be able to participate in the growth of the Indian LCV market with reliable and innovative vehicles that will match the expanding need for transportation of light cargo in small to medium distances," said Andy Palmer, corporate vice president, Nissan. "We are now focused on selecting the best production site to ensure the optimum mix of efficiency of operations, logistics and quality of the output."