CHENNAI: By sewing up a binding master co-operation agreement with Nissan Motor, Hinduja Group flagship Ashok Leyland has formalised its entry into the light commercial vehicle (LCV) segment. The partnership will entail an investment of $500 million, for the formation of three joint venture companies.
The alliance will lead to the birth of three companies. A vehicle manufacturing company with 51% by Ashok Leyland and 49% by Nissan. This will kick-start production in 2010 and will include new generation Nissan Atlas F24 light duty truck, in addition to a range of products covering applications from 2.5 to eight ton gross vehicle weight.
A powertrain manufacturing company, where Nissan will own 51% and 49% will be held by Ashok Leyland, to manufacture and assemble engines and other drivetrain components to be fitted in LCV products and for export.
Third will be the formation of a technology development company, to develop LCV products and related powertrains, for the Indian and select global markets. This 50:50 JV company will be located in Chennai, where products developed, will be sold under the Ashok Leyland and Nissan brands.
Announcing this at a press conference here on Monday, Ashok Leyland managing director R Seshasayee said crafting a strategic partnership, to make its foray into the LCV segment has been on the company?s radar for some time now. The company has been consolidating its position in the medium and heavy vehicle segments and the new partnership is expected to help address automotive adjacencies, especially in the critical LCV space.
?Nissan Motor is a very respected name, offering hi-quality engineering. We have been looking at several alternatives in the LCV segment and developing our own technology for that,? he said, adding that the Nissan tie-up will enable brand value to be shared that would be complementary in nature.
?We have had an extremely smooth sailing with Nissan. We have concluded this agreement for a lasting and a durable partnership,? he said, adding the pact will adopt the frugal engineering approach to churn out hi-quality products and ensure market penetration.
Expecting an extremely challenging task ahead for both companies, Mr Seshasayee said by 2010, tight targets would be in place from the investments and cost and pricing structure perspectives. The full-range of vehicles will position the company as a global player and it will be backed by support in all its adjacencies from Nissan.
In the medium term, production volume, for both domestic and export markets, is expected to grow beyond 1,00,000 units annually, he added.
Ashok Leyland co-chairman Dheeraj G Hinduja said after a 60-year focus on the heavy commercial vehicle segment, the company had been able to embark on its LCV foray, in line with its aggressive future corporate plans for growth.
|
