Nissan sends JV termination notice to Ashok Leyland
17 February 2016
Japanese company Nissan has sent a termination notice to its Indian joint venture partner Ashok Leyland Ltd, a week after the Hinduja Group's flagship company moved a district court near Chennai over its legal dispute with Nissan.
While officials at Ashok Leyland declined to comment, saying the matter was ''sub-judice'', a Nissan spokesperson said, ''We are working with Ashok Leyland for a mutually agreeable solution. We have no further comments on the subject.''
Last week, a Nissan spokesperson said, ''We have received the notice from Ashok Leyland and we are contesting it.''
Ashok Leyland's partnership with Nissan for light commercial vehicles has been facing issues for more than a year. ''The Stile and Evalia platforms were a mistake,'' said Vinod Dasari, managing director, Ashok Leyland, told Mint earlier this month. Ashok Leyland Stile and Nissan Evalia were among the products that came out of the joint venture.
''Like any joint venture, we have issues with our joint venture partners. Sometimes good and sometimes bad,'' said Dasari.
According to a document filed with the Board for Industrial and Financial Reconstruction (BIFR) in November last year, the joint venture's net worth has been fully eroded due to accumulated losses, which stood at Rs172.37 crore. The investment in the factory in Kanchipuram district, near Chennai, was Rs9.29 crore, the BIFR document said.
In 2008, Nissan Motor and Ashok Leyland signed three joint ventures for light commercial vehicles business, power train manufacturing and technology development. While Ashok Leyland has 51 per cent and Nissan has 49 per cent in both vehicle manufacturing and power train companies, they are 50:50 partners in the technology development company.
Ashok Leyland had earlier said it wrote off Rs214 crore from the joint venture which reported a loss of Rs791 crore in the last fiscal.