Close [X]

Ashok Leyland drags JV partner Nissan to court

Auto major Ashok Leyland has moved the Kanchipuram District Court against its joint venture partner Nissan, asking the court to prevent the latter from using its automotive manufacturing equipment installed at the Japanese company's factory in Chennai.

The joint venture partners have been in a legal dispute over the loss making JV. Key spokespersons from Nissan have confirmed receiving the notice and have said they are contesting it.

The joint venture, Ashok Leyland Nissan Vehicles Ltd, was set up as three separate companies for vehicle manufacturing, engine manufacturing and technology development. In this venture Ashok Leyland has a 51% stake and Nissan 49%.

While products such as the seven seater passenger vehicle Stile and Nissan Evalia have faced a poor customer response, the JV’s key product Dost, a small pickup truck has been a major success with sales crossing more than a lakh of units.

Ashok Leyland Nissan Vehicles reported a net loss of Rs 791 crore for the 2014-15 fiscal. The company also wrote off Rs 214 crore as impairment based on the value of its investment in the joint venture. It took another impairment charge of Rs 157 crore in the September quarter relating to its JV with John Deere.