By IANS
Chennai : India’s leading bus and truck maker Ashok Leyland Limited Wednesday joined hands with Japan’s Nissan Motor Company to make light commercial vehicles (LCV).
The two firms signed a heads of agreement (HoA) to float three joint venture companies – two of them will manufacture outfits to make LCVs and powertrain and the third one will be a technology company that would develop LCV-related products.
The partnership between the companies will include the development, manufacture and cooperation for distribution of LCV products under both the Ashok Leyland and Nissan brands, Ashok Leyland stated in a media release here.
While Ashok Leyland would hold the majority stake in the vehicle manufacturing company, Nissan Motor will be the major shareholder in the powertrain company.
They will have equal stakes in the technology company.
The vehicle manufacturing company would make vehicles for both companies and will have a capacity of 100,000 units. It would cater to the domestic as well as export markets.
Similarly, the powertrain company will manufacture and assemble LCV engines for the domestic and export markets. The third company would develop LCV products and related powertrains for the Indian and emerging markets.
In addition, the Ashok Leyland and Nissan Motor will look at the possibilities of sharing their respective sales networks. In India Nissan Motor will have access to Ashok Leyland’s dealer network.
In the overseas markets, Ashok Leyland may have access to Nissan Motor’s distribution set-up.
The two companies will now conduct a detailed feasibility study covering all proposed areas of cooperation, leading to the signing of a memorandum of understanding and the subsequent formation of the legal partnership. This study is expected to conclude by October 2007.