Ashok Leyland and Nissan Motor Co have signed a binding Master Co-operative
Agreement (MCA) for the formation of three joint venture companies supporting the light
Commercial Vehicle (LCV) business. The agreement was signed in Chemical by R
Seshasayee, Managing director of Ashok Leyland and carlos Ghosn, president and CEO
Of Nissan Motor Co. The agreement follows the signing of the heads of the heads of
Agreement (HoA) document in August this year and reflects progress achieved with the
detailed project evaluation. It formalises the partnership between the companies which
will include the development and manufacture of LCV Products under both the Ashok
Leyland and Nissan brands as well as co-operation in sales. The two companies anticipate
an investment in the neighbourhood of US$ 500 million for the creation of three joint
venture companies that are to cover vehicle manufacturing, powertrain manufacturing and
technology development business area.
The Vehicle Manufacturing Company will have exclusive rights to manufacture LCV
product in India both the partners. Manufacturing facilities will be located in India and the
company will owned 51 per cent by Ashok Leyland and 49 per cent by Nissan. Production will
start in 2010 and will include the new generation Nissan Atlas F24 light duty truck, in addition
to a range of products covering application from 2.5 to 8 tonne gross vehicle weight (GVW).
In the medium term, production volume, intended for both Indian and export markets, is
expected to grow beyond 100,000 units annually. The powertrain Manufacturing company
will be responsible for the manufacture and assembly of engines and other drivetrain component
to be fitted in LVC Products and for export manufacturing will be located in India and the
company will be owned 51 percent by Nissan and 49 percent by Ashok Leyland.
The technology Development company will be responsible for the development of LCV
Products and related powertrains, destined for the Indian and select global market. This JV
Company will be owned 50:50 by the two partners and located in Chennai. The products
developed will be sold under both the Ashok Leyland and Nissan brands . In addition, the
two partner also expect to cooperate to leverage each others dealer networks in specific
global markets. For Example, this could provide Nissan with access to ashok Leylands dealer
in India and for Ashok Leylands dealer network in specific export markets. The JV is also set
to benefit from leveraging the sourcing strength of both the partners.
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| Posted : 2/27/2008 |
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