Ashok Leyland may outsource LCV production to Nissan-Renault

Ashok Leyland may outsource LCV production to Nissan-Renault

Mumbai: The Chennai-based joint venture between French auto maker Renault SA and Nissan Motor Co. of Japan may have found a new partner.

According to people familiar with the situation, Ashok Leyland Ltd is all set to move its light commercial vehicle, or LCV, production into the Renault-Nissan plant, which is a 50:50 venture between the two carmakers.

It is not clear whether Ashok leyland will be picking up a stake in the joint venture (JV) or enter a contract manufacturing agreement.

Nissan and Ashok Leyland had in 2007 formed three joint ventures in India for LCVs, engines and other components.

“We can confirm that during the latest review meetings. Ashok Leyland and Nissan executives have discussed the progress of our three JVs in India," a Nissan statement said. “As stated earlier, the project has witnessed delays on account of land procurement and allocation.

“In the context of the global economic downturn, the two companies have also found an opportunity to further optimize their investment, including use of available facilities in the first phase. Product development activities have continued without interruption underscoring our shared commitment. The JV projects are expected to go on stream in 2011-12."

The initial production in Chennai for LCVs is likely to be 70,000 units and the two partners have already identified two LCV products to be manufactured out of this facility. One of them is likely to be Nissan’s NV 200 Vanette and the other a people mover.

According to the people familiar with the situation who didn’t want to be named, a senior management delegation from Nissan met 300 suppliers in Chennai on 26 October to discuss product and sourcing plans.

Ashok Leyland and Nissan are expected to make a joint announcement in the next few weeks. When contacted, an Ashok Leyland official said, “Ashok Leyland cannot unilaterally comment on the JV status and plans."