Chennai: India’s second largest heavy commercial vehicle maker Ashok Leyland Ltd and Japanese car maker Nissan Motor Co. Ltd on Tuesday announced the launch of three light commercial vehicles (LCVs) from 2011 through 2013. The auto makers also confirmed to be in talks to create a small car for the Indian market within the $2,000-6,000 (Rs93,400-Rs2.8 lakh) price range.
Tapping market: Nissan Motor’s Andy Palmer (left) and Hinduja Automotive’s V. Sumantran at a press conference in Chennai on Tuesday. Nissan is also in talks with Ashok Leyland for developing a small car. Ganesh K/Mint
In mid-2011, the first LCV or compact truck will be rolled out of the truck maker’s Hosur factory in Tamil Nadu with the Ashok Leyland sticker, marking the Chennai-based firm’s entry in this category, followed by a second launch in 2013. Nissan will start marketing an LCV with its brand name, to be produced out of its Oragadam plant near Chennai, in the second half of 2011, according to Andrew Palmer, senior vice-president at Nissan.
Ashok Leyland trucks would be sold through its dealerships while Nissan trucks would be sold through its network. Plans are also on for both the brands to be exported to the West Asian markets next year.
During the downturn, LCV sales fared better than those of heavy and medium commercial vehicles as transporters preferred ferrying low-volume deliveries in smaller trucks. rather than large, unfilled, fuel-guzzlers.
“With the improving economy, there will be even more demand for smaller vehicles plying goods intracity and also to smaller towns,” said Umesh Karne, a Mumbai-based analyst with Brics Securities Ltd.
In 2007, Ashok Leyland and Nissan had chalked their entry into this low-margin, high-volume market, pledging around Rs2,300 crore for the three joint ventures (JVs)—an LCV manufacturing firm, an engine manufacturing company and a technology development business.
Palmer, who is also the chairman of the JV company Ashok Leyland Nissan Vehicles Ltd, confirmed that Japanese auto maker is in initial discussions with the Hinduja Group company for a small car product in India.
“We are determining the customers, the price they are willing to pay and the size of vehicle they need,” Palmer said. “One of our favourite candidates is Ashok Leyland.”
French car maker Renault SA, which through its 1999 alliance with Nissan is the world’s fourth largest car maker, already has a partnership for the development of an ultra-low-cost car with Bajaj Auto Ltd.
Palmer said the car likely to be developed with Ashok Leyland will not compete directly with the Bajaj-Renault product.
“In India, you’ve got the (Tata Motors’ budget car) Nano at Rs1 lakh and the global players are between Rs3-4 lakh,” Palmer said, adding that there’s potential for more than one car to fill in the price gap between $2,000 and $6,000.