Ashok Leyland sends legal notice to Nissan

Chennai: Commercial vehicles major Ashok Leyland on Friday said that it has sent a legal notice to its Japanese joint venture partner Nissan for misusing its equipment to make cars instead of light commercial vehicles as had been agreed.

A senior company official also said it may set up an assembly plant, at an outlay of around Rs.30 crore, rolling out bus and trucks in Kenya to cater to the African markets while launching two models soon – a 40 seater school bus badged as Sunshine and an 8.5-9 ton truck badged Guru.

“It is true that we have issued a legal notice to Nissan. As the matter is sub judice I cannot comment further,” chief financial officer Gopal Mahadeven told reporters here.

He said Ashok Leyland is also in discussion with another joint venture partner John Deere on the way forward for the earthmoving equipment venture Ashok Leyland John Deere Construction Equipment Company.

According to reports, Ashok Leyland had sent a legal notice to Nissan for using its equipments to roll out cars instead of the LCVs for which a joint venture company has been formed.

The equipments are housed in Nissan’s plant at Oragadam near here.

Queried as to why Ashok Leyland has taken the matter to the court and whether it had asked Nissan for equipment usage fee, Mahadevan declined to answer, saying that the matter is in the court.

Ashok Leyland owns 51 percent while Nissan owns the balance in the joint venture company Ashok Leyland Nissan Vehicles Pvt Ltd.

The two warring partners have two more joint ventures – Nissan Ashok Leyland Powertrain Pvt. Ltd., the powertrain manufacturing company owned 51 percent by Nissan and 49 percent by Ashok Leyland and Nissan Ashok Leyland Technologies Pvt. Ltd., the technology development company owned 50:50 by the two partners.

About the company’s African venture, Mahadevan said the company would ideally look for a local partner and the vehicles would be sent from India in a semi-knocked down or completely knocked down position to be assembled there.

“The idea is to increase our share of export revenue to 25-30 percent in the total turnover in 3-5 years time frame and also diversify the overseas market. The overseas market will be managed out of Middle East,” he said.

According to Mahadevan, the company’s vehicles are not new to the African markets as Ashok Leyland has already supplied vehicles as part of some project orders.