The Hindu Business Line : Ashok Leyland, Nissan join hands to produce trucks

Chennai, Aug 29 Ashok Leyland and Nissan Motor Co Ltd today signed heads of agreement for forming three joint venture companies to produce light commercial vehicles (LCV), powertrains and R&D.

Details such as investments, product range and locations have not yet been disclosed.

The Managing Director of Ashok Leyland, Mr R. Seshasayee, told Business Line that such details are being worked out and might be made public only next month.

In addition to the three joint ventures, the two partners are also studying co-operation in the area of sales and distribution.

This includes providing Nissan with access to Ashok Leyland’s dealer network in India and allowing Ashok Leyland to use Nissan dealer networks in identified export markets outside India.

With this, Ashok Leyland fulfills a seven-year promise – that it would enter manufacture of LCVs.

The truck maker is close to launching a few high-capacity products, perhaps even a 49-tonne truck with a payload capacity of 40 tonnes.

Last year, it took over the Czech Republic-based Avia, which got it access to products of 6-9 tonne capacity.

The only gap in its product portfolio is the sub six-tonne range.

Although Ashok Leyland has not announced the range of trucks its joint venture with Nissan would produce, it will presumably be those in sub-6 tonne range.

Today, multi-axle vehicles dominate the movement of goods between cities and with several cities restricting entry of big trucks during daytime, there is bound to be a demand for LCVs to take the cargo into cities.

The Ashok Leyland-Nissan tie-up seeks to address this market.

This is the fourth tie-up that Ashok Leyland is announcing in two months.

In July, the company announced two joint ventures – one with Alteams of Finland for high-pressure die castings and another with Siemens VDO for electronic components for vehicles.

Earlier this month, the company converted its wholly owned freight exchange subsidiary, Ashley Transport Services Ltd, into a joint venture with Shriram Transport Finance Company.

On the BSE on Wednesday, Ashok Leyland’s shares closed at Rs 37.65, higher by Rs 1.50 over the previous close.

As many as 10.68 lakh shares changed hands.