Ashok Leyland recently announced that they have completed the acquisition of Nissan’s Motor Corporation’s stake in three joint ventures. It is the second largest commercial vehicle manufacturer in India. These ventures are between the companies Ashok Leyland Nissan-Vehicles Ltd., Nissan-Ashok Leyland Powertrain Ltd., and Nissan-Ashok Leyland Technologies Ltd.
Both Nissan and Ashok Leyland had already announced this arrangement. Basically, in this agreement, Nissan would transfer its ownership in the three units to Ashok Leyland. According to a company statement, with all necessary statutory approvals now in place, they completed the acquisition. This is for a consolidated consideration of Rs 3 paid by Ashok Leyland for the shares of the three JVs.
According to Vinod K. Dasari, the Chief Executive Officer and Managing Director of Ashok Leyland, they are very positive on the future of the light commercial vehicles (LCV) business which is growing. In addition, he further states that even though they have already acquired 100% ownership of the JVs, Ashok Leyland will continue to be associated with Nissan for the technology of the existing Dost, Partner, and Mitr models. Furthermore, he says that these are very important products for the company. In essence, these hold tremendous potential both within and outside “Our association with Nissan continues in a new relationship.”
Under a licensing agreement, Ashok Leyland will continue to build the Dost, Mitr, and Partner light commercial vehicles. These will be according to the design, engineering, and technology of Nissan. A technical support arrangement will ensure the availability of parts, as well as servicing for customers. More than that, Nissan and Ashok Leyland have both agreed in the continuing procurement of parts for Nissan which are from India.
“Nissan is committed to India and has invested substantially in manufacturing, research and development and sales networks in the country. We are on track to becoming a major player in the Indian market. Under the licensing arrangement with Ashok Leyland, Indian commercial vehicle customers can continue to benefit from Nissan’s engineering, with servicing and parts availability also ensured,” says Philippe Guérin-Boutaud, Nissan corporate vice president in charge of the Global LCV Business Unit.