Ashok Leyland, Nissan terminate eight-year-old JV

MUMBAI India’s second-largest truck maker Ashok Leyland and Japan’s Nissan Motor are finally parting ways in their loss-making light commercial vehicle joint ventures.

MUMBAI India’s second-largest truck maker Ashok Leyland and Japan’s Nissan Motor are finally parting ways in their loss-making light commercial vehicle joint ventures.

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As a part of a restructuring deal announced on Wednesday, Ashok Leyland will buy out Nissan’s stakes in the three joint ventures focused on technology development and manufacturing of power-trains and vehicles.

“Nissan has agreed to sell to Ashok Leyland all of Nissan’s shares in three joint venture companies that were formed in 2008. Under the agreement, these joint ventures will become wholly-owned Ashok Leyland subsidiaries, upon receipt of all necessary approvals from the regulatory authorities in India,” the companies said on Wednesday, without disclosing financial details.

The three JVs include Ashok Leyland Nissan Vehicles, Nissan Ashok Leyland Powertrain and Nissan Ashok Leyland Technologies.Under a licensing agreement, Ashok Leyland will continue to build the Dost and Partner LCVs, based on Nissan’s design, engineering and technology. There will be a separate technical support arrangement for servicing and parts availability for customers. The two companies will also continue to procure made in India parts for Nissan.

“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,” said Philippe Guérin Boutaud, in charge of the global LCV business at Nissan.

The relationship between the two companies had soured and Ashok Leyland had dragged the Japanese company to court earlier this year citing violation of terms of contract.