Ashok Leyland – Nissan LCV project

The Ashok Leyland – Nissan LCV project crossed a significant milestone with the signing of a memorandum of understanding (MoU) with the Tamil Nadu Government for acquiring 380 acres to locate the facilities of the joint venture companies at Pillaipakkam, 40 km off Chennai. The integrated plant will be utilized to set up the vehicle and powertrain manufacturing facilities and a technology development unit for the three companies of the joint venture that was formed in May last.

These companies have already started functioning, and the joint venture is on course to roll out the first vehicle by 2010-2011. Exports are expected to account for 20 per cent of the first phase capacity of 100,000 LCVs.

The two partners also announced the top management structure of the three joint ventures, which reflects the shared responsibilities and control drawing on the domain strengths of each of the companies, including the critical functions of product development, quality, manufacturing and procurement.

On the occasion, Ashok Leyland also announced its expansion plans in respect of its MDV capacity under the MoU with the Tamil Nadu Government. The company commits further investments at both Ennore and Hosur, as well as new locations, including a green field site near Chennai. These investments will create integrated facilities for engines, gear boxes, press shops, chassis and parts.

The combined investments for the LCV and MDV projects will be over Rs. 40 billion. Taken together, the new facilities will create more than 4,000 new jobs in these companies. Investments are scheduled to be completed in 7-8 years.

Mr. Andy Palmer, Corporate Vice President, Nissan Motor Company Ltd., Light Commercial Vehicle Business Unit, said: “We are now in the ready to start real world operations in India. With the acquisition of the land in Tamil Nadu, we can now start the construction of the two manufacturing sites for vehicles and engines, and we look forward to co-operating with our partner for a frugal yet high quality vehicle production.”

Mr. V. Sumantran, Executive Vice-Chairman, Hinduja Automotive Ltd. and Chairman, Nissan Ashok Leyland Powertrain Ltd., commented: “Taking into account the secular growth trends of the Indian economy and export opportunities, the joint venture will help both parent companies address the future market. The products likewise anticipate future growth of expectations and will offer customers new levels of performance and experience.”

Said Mr. R. Seshasayee, Managing Director, Ashok Leyland: “The joint venture with Nissan is a major step in our plans to be a full range player, and we are confident that we can meet our production targets by leveraging the combined expertise, market insights and experience of the two partners. The combined investments we have planned in our JV with Nissan and for our own medium and heavy duty vehicle production reflect our commitment to the State of Tamil Nadu where we plan our next cycle of growth.”