Plans to launch trucks and passenger vehicles in the 5-7.5 GVW category

The light commercial vehicle (LCV) joint venture between Ashok Leyland of the Hinduja Group and Nissan of Japan will roll out its first product as scheduled in mid-2011.

The first product would be in the higher tonnage category (5-7.5 gross vehicle weight (GVW)). “We plan to launch three new vehicles in three years in India. This is an ambitious plan. It will allow Ashok Leyland to expand its business at home and in other markets. At the same time, it will also mark the entry of Nissan into India's LCV market,” said Andy Palmer, Senior Vice-President, Nissan Motor Company. The vehicles would be produced using some of the existing Indian assets of the two partners, Mr. Palmer told presspersons here on Tuesday.

Production of the first vehicle, bearing the Ashok Leyland badge, would start at the Hosur plant of the Hinduja flagship company in the first-half of 2011. The second vehicle, a Nissan brand, would roll out of the Nissan lines at Oragadam in the second-half of 2011. The third vehicle would roll out of the Hosur plant, bearing Ashok Leyland badge, in 2013, he added. “We are also studying possible further extensions of the line-up for both brands,” Mr. Palmer said.

The joint venture had proposed to launch both trucks and passenger vehicles in the 5-7.5 GVW category, which accounted for about 13 per cent of LCV goods segment in India in 2009-10. It is also likely to make LCV in the sub-3.5 GVW category, which accounts for about 84 per cent of the LCV goods segment. A broad hint to this effect was given by V. Sumantran, Executive Vice-Chairman, Hinduja Automotive Ltd., when he said that the joint venture would be addressing about 90 per cent of the LCV market with its first set of products.

Besides marketing their respective products in India, the two partners would individually explore the possibilities of exporting their vehicles to specific markets. In addition, the joint venture would produce parts for other sites, leveraging its ability to keep costs at a competitive level.

The joint venture, Mr. Palmer said, had planned an initial capacity of 1.50 lakh units for LCVs.

Mr. Sumantran said the two partners were comfortable with each other. “We are exploring a number of possibilities,” he added. The maturing Indian supply chain, he said, was responsible for bringing in new cost points. The joint venture, Mr. Sumantran said, “is blessed with the best genes and the committed support of its parents.”

While declining to divulge investments in the first phase, he said the usage of existing capacities had made it possible for the joint venture to stick to the time schedule for the product launch.

“Beyond this, both parents are committed to support the course towards Phase-2, wherein we expect to move to a greenfield site,” he added. The joint venture products, they said, would reach the market leveraging the well-established dealer network of Ashok Leyland as well as Nissan's fast-growing chain

“We have created a technology unit with equal participation from the two companies, a vehicle production company where Ashok Leyland holds a majority stake of 51 per cent and a power-train production company where Nissan holds majority 51 per cent. This structure remains unchanged. This confirms that the spirit of the joint venture remains untouched in spite of the challenges brought about by the economic crisis that struck world business last year,” he added.

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