By IANS
Chennai : Hinduja group’s Ashok Leyland Ltd and Japanese auto major Nissan Motor Co Ltd have decided here Monday to promote three joint venture companies in the light commercial vehicle (LCV) segment in India.
Carlos Ghosn, president and CEO of Nissan Motor, and R. Seshasayee, managing director of Ashok Leyland, signed the agreement.
A total outlay of $500 million is expected for the three companies. The partners would also leverage each other’s dealer networks in global markets.
With this, the two companies cemented their August announcement of getting into LCV production jointly in India.
First, there would be a JV where Ashok Leyland would hold 51 percent stake and Nissan the remaining. This company would build a plant, to be located either in Tamil Nadu, Uttarakhand or Andhra Pradesh, to produce Nissan Atlas F24 light duty trucks. The range would include models from 2.5 to 8 tonne gross vehicle weight.
The decision on the location of the plant would be taken in a few weeks’ time, said Seshasayee.
The plant is expected to start production in 2010. In the medium term, production volume, intended for both Indian and export markets, is expected to grow beyond 100,000 units annually.
Feeding the vehicle-making company with engines and other components will be another company in which Nissan would hold 51 percent and Ashok Leyland 49 percent.
The third would a technology company in which the two companies would hold equal shares.
According to Ghosn, Nissan is looking at Brazil, Russia, India and China for growth.
He said, “Out of the 65 million LCVs and cars sold in world in 2006, 24 million units were accounted by developing markets. In 1999, the figure was 11 million units out total LCV and car sales of 54 million.”
Under a different three-way tie-up in India, Nissan would roll out cars with Mahindra and Renault.
The Japanese company is also pursuing plans to rolling out a sub-$3,000 (Rs.118,320) in partnership with Pune-based Bajaj group.