Hinduja group flagship Ashok Leyland said on Wednesday that it had reached an understanding with Japan’s Nissan Motors to float three joint ventures to strengthen its light commercial vehicle business, including companies to make vehicles, power-train manufacturing and develop technology.
The two companies have signed a heads of agreement (HoA) a non-binding document outlining the main issues relevant to a tentative partnership agreement. The first stage of the proposed partnerships would include developing, manufacturing and marketing light commercial vehicle (LCV) products under the Ashok Leyland and Nissan brands.
The proposed vehicle manufacturing company, a majority stake owned by Ashok Leyland, will have production units in India with exclusive rights to make LCV products.
The agreement underscores Nissan’s growing interest in India and its strategy to expand in a rapidly growing automobile sector.
Ashok Leyland MD R Seshasayee said: “This partnership with Nissan, renowned for their product engineering and a wide range of LCV products, will allow Ashok Leyland to expand into the fast growing LCV segment in India.” Nissan’s President and CEO Carlos Ghosn said: “Our LCV business and overall expansion into India represents two of the biggest growth oportunities for Nissan in the medium and long term. This latest investment will broaden our coverage of this market in addition to providing new LCV products for emerging markets.”