To enter the construction equipment business; Production to commence by 2010.
Ashok Leyland, the flagship of the Hinduja Group in India, has signed an agreement for a joint venture with John Deere, for manufacturing and marketing of construction equipment. The JV seeks to commence production by early 2010 and will initially roll out Backhoes and Four-wheel-drive Loaders. The range will subsequently be expanded to include a full line of construction equipment. Beyond India, the largest backhoe market in the world in 2007, the products will be exported to both Ashok Leyland and John Deere markets.
The 50:50 JV will bring together Ashok Leyland's expertise in the automotive sector, their marketing and distribution strength and John Deere's technical know-how and vast experience in the business of construction equipment. John Deere is the world's largest manufacturer of equipment for agriculture and forestry and a major equipment supplier for construction and lawn and turf care.
The JV will build a manufacturing facility in India and is currently evaluating site locations.
Executive comments:
Mr. R Seshasayee, Managing Director, Ashok Leyland
"With this JV, we realise our foray into a new and adjacent vertical as part of Ashok Leyland's diversification plans. We see huge synergies between this business and our existing one of commercial vehicles, in terms of aggregates, parts and distribution network. We are happy that in John Deere, we have a technology leader with an impressive portfolio of proven and popular products, to partner us in this venture."
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Mr. Samuel R. Allen, President, Worldwide Construction and Forestry Division, John Deere
"In Ashok Leyland, we have found an ideal partner with a shared vision. This action enhances John Deere's growth of the construction equipment business outside of North America. India is an important market and Ashok Leyland is a knowledgeable partner with strengths in brand recognition, quality manufacturing, distribution and loyal dealerships."
The Hinduja Group is an investment and banking group with a diversified global portfolio of holdings across the manufacturing services and banking sectors. The Group, founded by Shri P.D. Hinduja in 1914, has activities across three core areas: Investment Banking, International Trading and Global Investments. As part of its global investments, the Group owns businesses in Automotive, Information Technology, Media, Entertainment & Communications, Banking &Finance, Infrastructure, Project Development, Chemicals & Agri business, Energy, Real Estate and Healthcare. The Hinduja Group also supports charitable and philanthropic activities across the world through the Hinduja Foundation.
Ashok Leyland is the flagship of the Hinduja Group and a leading manufacturer of commercial vehicles in India with 2007-08 turnover of more than US $ 2 billion. With six manufacturing locations at Chennai, Hosur (three plants), Alwar and Bhandara, the Company has an annual production capacity of 84,000 vehicles with additional 100,000 vehicle capacity planned by 2010. The Company has associate companies in the Czech Republic and the UAE and joint ventures in Sri Lanka and Bangladesh, besides exports to over 20 countries worldwide.
John Deere (Deere & Company - NYSE: DE) is the world's leading provider of advanced products and services for agriculture and forestry and a major provider of advanced products and services for construction, lawn and turf care, landscaping and irrigation. John Deere also provides financial services worldwide and manufactures and markets engines used in heavy equipment. Since it was founded in 1837, the company has extended its heritage of integrity, quality, commitment and innovation around the globe.