Hinduja Group flagship Ashok Leyland Ltd has completed acquisition of shares from joint venture partner Nissan Motor Co Ltd in three joint venture companies formed between the two companies, namely, Ashok Leyland Nissan-Vehicles Limited, Nissan-Ashok Leyland Powertrain Limited and Nissan-Ashok Leyland Technologies Limited.
In September 2016, Ashok Leyland and Nissan announced that they had reached a new arrangement in which Nissan would transfer its ownership in the three JVs to Ashok Leyland subject to statutory approvals.
With all necessary statutory approvals in place, the acquisition was completed for a consolidated consideration of Rs 3 paid by Ashok Leyland for all the shares of the three JVs.
Vinod K Dasari, Chief Executive Officer and Managing Director, Ashok Leyland, who said that this is an important milestone in the history of Ashok Leyland, elaborated, "We are very positive on the future of the LCV business which is growing. While we have acquired 100% ownership of the JVs, we will continue to be associated with Nissan for the technology of the existing Dost, Partner, and Mitr models."
"These are very important products for the company and hold tremendous potential both within and outside India. The company's association with Nissan continues in a new relationship," he added.
Under the new arrangement, Ashok Leyland will continue to build, under a licensing agreement, the successful Dost, Mitr, and Partner light commercial vehicles, which are based on Nissan's design, engineering and technology. Servicing and parts' availability for customers will be ensured by a technical support arrangement. In addition, the two companies have agreed to continue a deal to offer made-in-India parts to Nissan.
Ashok Leyland and Nissan decided to part ways from the loss-making Light Commercial Vehicle (LCV) JV, which was formed in 2007 with the JVs incurred losses and the relationship turned sour. The JVs manufacture and sell LCVs in India only. However, the LCVs manufactured by vehicle JV are exported by AL.
These joint ventures focus on technology development, and manufacturing of powertrains and vehicles. Under the agreement signed on September 7, 2016 by senior executives of Nissan and
It may be noted, Nissan has already suspended the production of its Evalia, under the JV.
Ashok Leyland said that following the acquisition of shares from Nissan, the three joint venture firms - Ashok Leyland Nissan-Vehicles Limited, Nissan-Ashok Leyland Powertrain Limited and Nissan-Ashok Leyland Technologies Limited - has become wholly owned subsidiaries of the Company.