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Why Ashok Leyland-Nissan JV has hit a rough patch

The joint venture has rolled out vehicles like Dost, Mitr, Partner, Evalia and Stile in India.

Meghna Mittal   New Delhi     Last Updated: February 17, 2016  | 13:16 IST
Why Ashok Leyland-Nissan JV has hit a rough patch
(Picture for representation purpose only. Source: Reuters)

Nissan Motor-Ashok Leyland, joint venture of eight years, have hit a rock bottom with Japanese auto major Nissan Motor Company having issued a termination intent for one of their companies. The flagship company of Hindujas, Ashok Leyland has even issued a legal notice against Nissan.

The joint venture has rolled out vehicles like Dost, Mitr, Partner, Evalia and Stile in India.

Let us have a look at the reasons which have made the relations between the two joint venture partners turn sour:

  • Nissan has sent a termination intent for the joint venture Nissan Ashok Leyland Technologies Pvt Ltd, in which Nissan and Ashok Leyland have a 50:50 partnership, claiming non-payment of royalty dues to Nissan for the technology usage.
  • Reportedly, there are also issues over trade dues in the joint venture company Nissan Ashok Leyland Powertrain Pvt Ltd, in which Nissan and Ashok Leyland have a 51:49 partnership. The supply of engines has been reportedly put on hold.
  • Ashok Leyland has accused Nissan for using the joint venture assets to manufacture Nissan brand of cars instead of the passenger vehicles under the joint venture, and has even filed has filed a legal notice in a district court in Tamil Nadu for the same. The Oragadam facility of Renault Nissan Alliance India Pvt. Ltd. (RNAIPL) when inspected by Directorate General of Central Excise Intelligence found the imports made under EPCG (Export Promotion Capital Goods) Scheme to being used for Nissan brand of cars, instead of the light commercial vehicles under the joint venture. The joint venture firm, Ashok Leyland Nissan Vehicles, has Ashok Leyland and Nissan in a 51:49 partnership.

 


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