Hinduja Group flagship Ashok Leyland (ALL) and Nissan Motor Company of Japan on Monday signed an MoU to foray into the manufacture of light commercial vehicles (LCVs) with an initial investment of $500 million under three different JVs. The agreements were signed in Chennai by R Seshasayee, MD of ALL and Carlos Ghosn, CEO of Nissan.
The three ventures are, one each for vehicle manufacturing, powertrain manufacturing and R&D. The investment in each of the JV will depend on the stake the partners hold. The cumulative investment for both partners across all the three JVs is pegged at $500 million. In the manufacturing JV, ALL will hold 51% while Nissan the rest. The plant will be located in India and the states shortlised include Tamil Nadu, Andhra Pradesh and Uttarakhand. “In the next few weeks we will announce the location of plant. This depends on what incentives we get from each state government,†Seshasayee said.
Production will start in 2010 and will include the Nissan Atlas F24 light duty trucks in addition to the range of products covering applications from 2.5 to 8.0 tonne gross vehicle weight. “The production capacity initially will be one lakh units,†Ghosn said.
The second joint venture is for making powertrain. It will be responsible for manufacture and assembly of engines and other drivetrain components to be fitted in the LCV and for exports. It will be located in India and Nissan will hold 51% while ALL will hold the rest.
The third, is a technology development company in which both parties hold equal stakes. This will be headquartered in Chennai. The products developed and made would be sold under both Nissan and ALL badges.
“We have been extremely happy with ALL for their frugal manufacturing operations and we feel they are the best partner for the LCV project. For Nissan, we needed a strong local partner as it is a sophisticated country and we now have a knowledgeable Indian partner,†Ghosn said.
