Ashok Leyland and Nissan, who have joined hands for manufacturing light commercial vehicles (LCV), are planning to roll out their first product by mid-2011. The two partners will produce 150,000 vehicles as part of Phase-I at their existing facilities and said a greenfield facility was very much on the cards.
Andy Palmer, senior vice-president, Nissan Motor Company and chairman, Ashok Leyland Nissan Vehicles (ANLV), said the two partners would use their existing facilities and networks to manufacture and sell vehicles and that there would not be any cross distribution of products. “It will be different brands,” he said.
While Nissan caters mainly to luxury markets, Ashok Leyland would address the volume market, he said. The joint venture partners would sell the products as their own brands in both domestic and international markets. “In select international markets, Ashok Leyand will use Nissan’s dealers,” he added.
While the first product will roll out from the Ashok Leyland’s facility at Hosur, the second will be from Nissan’s upcoming facility being set up with French partner Renault at Oragadam in Tamil Nadu. The third product would again be from Ashok Leyland’s facility, according to V Sumantran, executive vice-chairman, Hinduja Automotive Ltd and Chairman, Nissan Ashok Leyland Powertrain Ltd.
ANLV will manufacture 5-7.5-tonne capacity LCVs, with different specifications in passenger and goods categories, said Palmer. “Of the 150,000 vehicles, 60 per cent will be manufactured by Ashok Leyland, and 40 per cent by Nissan,” he added. “With these products, we can address 90 per cent of the market,” Sumantran said, adding it was currently pegged at 350,000 units per annum.
While declining to comment on the investment for Phase-I, Sumantran said it would be part of the total investment committed for the joint venture, which would be around Rs 2,300 crore. He added that one fifth or 30,000 units of the total production from Phase-I would be for export markets.
Describing the joint venture company as offering ‘Japan quality at Indian cost,’ Sumantran said the first product would be launched as planned, and that the downturn had forced the company to roll out the products in a faster way.
Land acquisition delays greenfield plant
The green field manufacturing facility proposed by Ashok Leyland and Nissan for manufacturing light commercial vehicles (LCVs) in Tamil Nadu is getting delayed due to land acquisition, Sumantran said about the Sriperumbudur facility.
“We would require 380 acres of land and there has been some delay in acquiring the land. We are in talks with the state government to allocate the required land for the project. So far we haven’t got anything,” he said.
Ashok Leyland’s parent Hinduja Group signed three JVs with Nissan Motor in October 2007 and planned to spend Rs 2,300 crore on LCV manufacturing, engine manufacturing and technology development facilities. The greenfield facility was supposed to go on stream in 2011, but was put on hold “temporarily” in 2009 citing "economic slowdown.”
