Leyland-Nissan joint venture a muddled drive

Ashok Leyland Nissan Vehicles Pvt Ltd, a joint venture between Ashok Leyland and Nissan to manufacture light commercial vehicles (LCVs), has various dimensions to it, pointing to borderline confusion on part of both the partners.

When the venture was formed two years ago, the partners were looking at cooperation in sales and distribution, especially Nissan eyeing Leyland’s network in India and Leyland Nissan’s networks abroad.

The firms had announced three joint ventures for making light commercial vehicles, powertrains and developing new technology, with an initial target to produce one lakh LCVs at a total investment of Rs 2,300 crore.

It was earlier reported by DNA Money wherein Ashok Leyland spokesperson had said that the partners have demarcated territories where they will retail and not step on each other’s toes.
But Kiminobu Tokuyama, managing director and CEO, Nissan Motor India, has denied any such demarcation. “We will sell in the same market as our partner, as the two products that will be offered are distinct. Ashok Leyland will sell its unique LCV and so will we.”

On the sidelines of the Delhi Auto Expo, R Seshasayee, managing director, Ashok Leyland, said, “Some products in the value segment will bear Ashok Leyland name, while those in the niche segment will have Nissan badge.”

However, Tokuyama denied this and said there is a possibility of a co-existence of Ashok Leyland badged products with Nissan badged products, and that Nissan will not be selling to a niche segment.

The partners have earlier spoken about product differentiation in terms of designing and specifications.

However, Tokuyama said details about it have still not been decided upon. He said both the partners will use a common platform for their respective products.

While Ashok Leyland has a relatively stronger dealer network and Nissan will sell its LCVs through its own network which is yet not in place, Tokuyama said, “We will be marketing through Hover Automotive India, the Indian company which handles marketing, distribution and sales of Nissan, but nothing is decided yet on the dealership network side.”

While the product is to be launched in mid-2011, there is an ambiguity with regards to the JV’s greenfield project, too. Seshasayee had said the land has been zeroed on but was under litigation.

On the other hand, Nissan seems to have no clue about it and maintained that both the partners will make their LCVs at their respective plants (Ashok Leyland-Hosur and Nissan-Oragadam).