Ashok Leyland and Nissan Joint Venture to replenish Indian CV market

Nissan NV200

Ashok Leyland and Nissan are reviving their plans for a greenfield project at Sriperumbudur after having put it on ice for the past few years. This project is targeted at the equal joint venture’s plans for growth in the automotive sector beyond 2015-16.

At present, the joint venture has its hands full with the three-platform lineup of small commercial vehicles, the first of which was displayed about a fortnight ago in Chennai. This is the Dost, fitted with a three-cylinder, five- speed gearbox common rail turbo-charged 1500 cc engine. "The second platform, which will roll out in 15-18 months from now, will be made by Nissan while the third platform will be made by Ashok Leyland," Dr V Sumantran, executive vice chairman, Hinduja Automotive said.

Each product will be positioned differently although the platform will be the same. So, while the second platform will be made into a personal use vehicle by Nissan, Ashok Leyland will make a commercial vehicle. Later, it will also make a personal use vehicle on this platform, Dr Sumantran said.

The ALIL-Nissan joint venture was initially to have been a greenfield facility but due to delays in land allotment and the subsequent global financial slowdown, the two partners chose to optimise existing facilities. Hence, the first three shared platforms, led by the recently unveiled Leyland Dost commercial vehicle, will be made at the respective existing locations of the two auto OEMs. While the Dost is being made at ALIL’s existing plant at Hosur, the second platform will be made at Nissan’s plant near Chennai and the third shared platform at Hosur. Engine manufacturing will follow the same plan since the JV has a separate agreement for powertrains.

"Nissan will position the vehicle it manufactures for personal use while Ashok Leyland will position it for the commercial segment. At a later date, we will also offer a personal version. Yes, there could be some overlap with the proposed General Motors offering which is based on Wuling design," Dr Sumantran said. He added that the personal use vehicle will be the Nissan NV200 van, which was launched last year in Japan, which will take ALIL into the below-7 tonne segment where it currently lacks a product.

This three-common platform-different-positioning strategy will mean that the JV will produce, for either OEM, vehicles that can seat from seven to 14 to 25 people. After which, Ashok Leyland’s existing range takes over, Dr Sumantran said.

The 'DOST'

Citing the example of ALIL’s new engine family, the Neptune, which already meets Euro IV and can move up to meet Euro V and VI norms, Dr Sumatnran said, "We can offer a range of products to our JV partner with a price advantage."

Referring to the greenfield plant, Dr Sumantran said the slowdown forced them to use existing facilities. Originally, the proposed investment had been pegged at Rs. 2400 crore, while the two partners made do with just half the amount. Now, with a greenfield project again on the agenda, Dr Sumantran maintained that they would invest a lot less. "We have achieved volumes with a smaller investment so our investment in Phase II will also be small," he said.

While admitting that more players are eyeing this segment, Dr Sumantran maintained that the JV vehicles will be positioned in a more upscale segment. "The market is shifting upwards while being cost conscious. The trend is that five years from now, standards will rise and vehicles oriented as SUVs for people carriers will become monocoque vans," he said.