India’s second largest truck and bus maker manufacturer, Ashok Leyland Ltd, and its Japanese joint venture partner, Nissan Motor Co. Ltd, are likely to kick off their joint operations in the country with three products with carrying capacities of 1.25 tonnes, 1.50 tonnes and 1.75 tonnes in an attempt to tap into one of the fastest growing segments in the country’s commercial vehicles market.
The portfolio will rival that of market leader Tata Motors Ltd, which has a very successful product portfolio in the same category, including the sub-1 tonne Ace model.
A vendor, who is supplying parts to the venture, said the partners have already commenced work on the three products which they will launch in goods and passenger carrying variants. According to this vendor, the initial plan is to produce 30,000 units in the first year, and launch the products by March 2010. He didn’t want to be identified because it would affect his business relationship with Nissan and Ashok Leyland.
According to the vendor, the firm is likely to locate the manufacturing of joint venture’s range of light commercial vehicles (LCVs) at Uttarakhand, where it is already setting up a plant at a cost of Rs1,000 crore to manufacture commercial vehicles. “As the LCV project progresses, we will jointly share information with the media. ... we have no incremental information to offer...,” said an Ashok Leyland spokesperson. A Supreme Court ruling that bars overloading of trucks is encouraging transporters to move to a hub-and-spoke model where heavy trucks transport goods over long distances, while light trucks do this within the city.
The joint venture partners have already developed five to six engines, which are currently being tested, the vendor said. “The company is to finalize the engines for first batch of products by April,” the vendor said. The engine manufacturing company will also supply to Nissan’s plants outside India, apart from supplying to the LCV project in India.
In October 2007, Ashok Leyland, the flagship company of the Hinduja Group, announced three joint ventures with Nissan. The first, in which Ashok Leyland will hold a 51% stake, will manufacture the trucks and will be responsible for sales. The second, where Nissan will hold a 51% stake, will manufacture engines for the trucks; and the third, where both Ashok Leyland and Nissan will hold equal stakes, will be a technology development company that will design new products and engines.
Nissan already has a joint venture with partner Renault SA to manufacture cars in Chennai. Nissan and Ashok Leyland will together invest Rs1,970 crore in the light trucks project.