The Hindu Business Line : Nissan’s second attempt at Indian LCV market

Hyderabad/Chennai, Aug. 29 Nissan’s proposed joint venture with Ashok Leyland is the Japanese company’s second attempt at the Indian light commercial vehicle market. In the mid-1980s, Nissan tied up with an Andhra Pradesh Government undertaking and set up a light commercial vehicle (LCV) plant at Zaheerabad, about 70 km from Hyderabad.

Nissan was among the four Japanese automobile manufacturers that entered the Indian market in the mid-1980s, all of them through joint ventures with Indian partners. The other Japanese companies were Toyota, which tied up with the DCM group; Mitsubishi with the Eicher group; and Mazda with Swaraj.

Those were the days of licence-Raj and the Andhra Pradesh Government had managed to get a licence to make LCVs.

Allwyn Nissan manufactured trucks with a payload below 5 tonnes.

According to automobile industry experts, the joint venture suffered due to a number of reasons. One, it went in for an indirect injection engine when the domestic commercial vehicle industry had switched over to direct injection engines. Two, Nissan had aligned with a State Government enterprise that had little or no experience in the commercial vehicle industry.

M&M buy

Mahindra & Mahindra acquired an interest in Allwyn Nissan towards the end of the 1980s and then merged the company with itself in 1994, when the accumulated losses of the unit were Rs 54 crore.

M&M, which has invested in the Zaheerabad facility, transferred the unit in 2005 to Mahindra International, a joint venture it has formed with International Truck & Engine Corporation of the US, for making trucks.

Nissan recently entered into a tie up with Mahindra & Mahindra and Renault, which owns close to 45 per cent of Nissan, to set up a manufacturing plant near Chennai, at an initial investment of Rs 4,000 crore.