Ashok Leyland reworks JV agreement with Nissan

Indian commercial vehicle manufacturer Ashok Leyland and Japan’s Nissan Motor Co. are reworking their joint venture (JV) to produce light commercial vehicles, Ashok Leyland Chief Financial Officer K. Sridharan said, in a bid to reduce the company’s spending by 39%. Among the issues being reconsidered are levels of investment, types of products to be introduced and the location of the manufacturing plant, which the companies said may be at Nissan’s upcoming Renault-Nissan facility in Oragadam in Chennai. Nissan said last year that the JV would delay production to September 2011, due to weaker local demand for trucks. Ashok Leyland also reduced its capital investment (capex) plan for the fiscal year ending March 31, 2009 through the next three years, from Rs32 billion (US$653.76 million) to Rs20 billion (US$408.60 million). To further reduce operating costs, the company said it may reduce the capacity of a new plant set to open in 2010 in Uttarakhand, India. (February 4 /13, 2009)