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Ashok Leyland and Nissan sign 3 LCV JVs

27th May 2008 Print
Hinduja Group flagship Ashok Leyland and Nissan Motor Co., Ltd, today announced the legal formation of the three JV companies for the Light Commercial Vehicle (LCV) business in India for vehicle manufacturing, powertrain manufacturing and technology development. This follows the signing of the Master Co-Operation Agreement between the two companies in October 2007.

The shareholding structures of the three joint ventures are as under:

Ashok Leyland Nissan Vehicles Pvt. Ltd, the vehicle manufacturing company will be owned 51% by Ashok Leyland and 49% by Nissan;

Nissan Ashok Leyland Powertrain Pvt. Ltd, the powertrain manufacturing company will be owned 51% by Nissan and 49% by Ashok Leyland;

Nissan Ashok Leyland Technologies Pvt. Ltd, the technology development company will be owned 50:50 by the two partners.

The aggregate investment in all three companies will be around Rs. 23 billion (approx. 575 Million USD). The enterprise will involve a capacity of 100,000 vehicles in the first phase, to be scaled up subsequently. The plant is expected to start production from 2010/11. Among the three platforms identified, covering applications up to 7.5 ton Gross Vehicle Weight, is an all-new generation Nissan Atlas F24 light-duty truck. In addition, an all-new engine is being developed specifically for LCV applications, as part of the range of Euro 3 and Euro 4 compliant diesel engines.

Executive comments
Mr. R. Seshasayee, Managing Director, Ashok Leyland: “The current growth plans of Ashok Leyland involve, not only our stated capacity additions and new product launches but also, with this important step, our entry into the fast-growing LCV segment. The balanced JV structure facilitates meaningful contribution from both partners and the best opportunity to leverage their respective strengths.”

Mr. Carlos Tavares, Executive Vice President, Nissan: “We made another important step in the creation of a solid structure that will allow Nissan and Ashok Leyland to enter successfully the light commercial vehicle market in India and global markets. This represents an important embedded element in our new NISSAN GT 2012 plan based on growth and trust.”

The Hinduja Group is an investment and banking group with a diversified global portfolio of holdings across the manufacturing services and banking sectors. The Group, founded by Shri P.D. Hinduja in 1914, has activities across three core areas: Investment Banking, International Trading and Global Investments. As part of its Global investments, the Group owns businesses in Automotive, Information Technology, Media, Entertainment & Communications, Banking & Finance, Infrastructure, Project Development, Chemicals & Agri business, Energy, Real Estate and Healthcare. The Hinduja Group also supports charitable and philanthropic activities across the world through the Hinduja Foundation.

Ashok Leyland is the flagship of the Hinduja Group and a leading manufacturer of commercial vehicles in India with 07-08 turnover of more than US $ 2 billion. With six manufacturing locations at Chennai, Hosur (three plants), Alwar and Bhandara, the Company has an annual production capacity of 84,000 vehicles with additional 100,000 vehicle capacity planned by 2010. The Company has associate companies in the Czech Republic and the UAE and joint ventures in Sri Lanka and Bangladesh, besides exports to over 20 countries worldwide.

Nissan Motor Company generated global net revenues of 10.824 trillion yen in 2007. Nissan is present in all major auto markets worldwide selling a comprehensive range of cars, pickup trucks, SUVs and light commercial vehicles under the Nissan and Infiniti brands. Nissan employs over 224,000 people worldwide.

The Nissan GT 2012 five-year business plan is focused on the company’s long-term performance combined with its responsibilities to stakeholders as a significant global business. The three commitments are:

Quality leadership
Zero-emission vehicle leadership
Five percent revenue growth on average over five years (FY2008 to FY2012)