 "Nissan hits another JV bumper on Indian roads")
While Nissan's Leyland JV has hit a roadblock after eight years of togetherness, its much-publicised proposed partnership with Bajaj Auto to make ultra-low cost cars could never take off and had to be shelved eventually.
Besides, Nissan's global alliance partner Renault also had to face partnership blues in India when its tie-up with Mahindra and Mahindra ran into rough weather and the Indian auto giant bought out the foreign partner from their JV here.
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Another tie-up that broke in India was Nissan's marketing partnership with Hover Automotive, which was promoted as a master franchise concept in the country and ended up as yet another unravelling of various partnerships sewed or proposed by Renault-Nissan's global chief Carlos Ghosn, who has always been known to be bullish on the India growth story.
When asked about numerous JV failures, Nissan India put up a brave face and said that its "joint ventures with Ashok Leyland are the only joint ventures Nissan have in India" and the assumption that it had multiple JVs was incorrect.
"The alliance between Nissan and Renault is the most enduring and successful in the history of the auto industry. Our growth worldwide has been has built on long-term partnerships.
"In case of Ashok Leyland, we are disappointed they walked away from negotiations and took the most serious option of legal action, which we maintain is unwarranted. Nissan wants an amicable solution so we can concentrate on building great vehicles for our customers," a Nissan India spokesperson told PTI in reply to queries about problems with the JVs.
While an Ashok Leyland spokesperson declined to comment on queries regarding the problems in the company's partnership with Nissan, the tie-up is headed for a break-up with both the sides having served notices and counter-notices to each other.
The Indian partner has dragged Renault Nissan Automotive India Pvt Ltd (RNAIPL) to the court over alleged violations of contract agreement and flouting of Export Promotion Capital Goods (EPCG) scheme regulations.
In May 2008, Ashok Leyland and Nissan had formed three JVs -- Ashok Leyland Nissan Vehicles Ltd (ALNVL) for vehicles manufacturing, Nissan Ashok Leyland Power Train Ltd (NALPT) for making power trains, and a technology JV Nissan Ashok Leyland Technologies Ltd (NALT).
The partners have invested about Rs 1,000 crore as equity between then.
Adding to the troubled relations, Nissan has served a termination notice for the technology joint venture and the differences continue to grow between the partners.
Ashok Leyland, a 51 per cent shareholder in its joint venture with Japan's Nissan Motor, has filed the suit to "protect and safeguard the interest" of the JV company, Ashok Leyland Nissan Vehicles Ltd, saying it was not getting the necessary cooperation from the members of the board representing the remaining 49 per cent shareholding.
Ashok Leyland is engaged in the business of manufacturing and selling commercial vehicles for the last 65 years and had a turnover of $2.2 billion in 2014-15 with present across 50 countries.
Ashok Leyland had entered into various JV understandings with Japan's Nissan Motor Company to commence light commercial vehicles business. This included a JV agreement for formation of Ashok Leyland Nissan Vehicles Ltd for the specific purpose of manufacturing and selling certain vehicles.
The JV was to draw upon the expertise and strength of Nissan and its associate Renault Nissan. It was also agreed that Renault Nissan Automotive India Ltd may manufacture its own branded vehicles, without conflicting with the requirement under the agreement between Ashok Leyland and Nissan.
The JV company was set up to manufacture various light and medium commercial vehicles and passenger vehicles and it also imported various high value machinery, equipment and tooling worth Rs 334 crore for the purpose of manufacturing two vehicles -- Stile and Evalia which were to be made by Renault Nissan Automotive India under a specific contract.
While importing specific plant parts and tools for the production of the two vehicles, the JV availed of 'Export Promotion Capital Goods Scheme' by specifically mentioning the name of location to which they were to be imported.
Out of the items imported under this scheme worth Rs 334 crore, items worth Rs 117 crore were installed and placed at the manufacturing facility of Renault Nissan. Rest of the imported items were installed at the location of other vendors, suppliers and contract manufacturers.
The licence conditions prohibited removal of all imported items from the place mentioned in the licence.
Ashok Leyland said certain interested parties decided to impair the production of the two vehicles during May 2015, after which Directorate General of Central Excise Intelligence raised a claim on the JV for the payment of duties which were waived off at the time of availing EPCG scheme.
DCGEI also observed certain wrongful use or diversion of certain assets supplied by the JV company in the premises of Renault Nissan and alleged that Renault Nissan was wrongfully using certain items imported by the JV under EPCG licence.
Nissan however assured that there was no misuse of the EPCG assets and tried to persuade Leyland to allow Renault Nissan to purchase the said assets from the JV.
Ashok Leyland has now alleged that Nissan was "only looking out for ways and means of saving Renault Nissan India and is attempting to waive the breach committed by Renault Nissan India to forego the losses caused due to the wrongful use of the items without any authority and/or permission an also in violation of law and the undertakings given by the Renault Nissan India".
Ashok Leyland said it is interested in taking appropriate action to salvage the situation, but Nissan is not extending the necessary cooperation and is "only interested in compelling and arm-twisting" it to agree to its terms relating to regularising the breach committed by Renault Nissan India.
In another complaint, Ashok Leyland said Nissan Motor on February 12, 2016 abruptly issued a termination notice, terminating Technology Transfer and License Agreement with respect to a 50-50 technology JV on account of certain alleged non-payment of royalty amounting to Rs 2.34 crore without giving any reminder or notice for the said royalty payment.