Japanese automobile major Nissan Motor Company Ltd has sold its stakes in three joint ventures with Ashok Leyland Ltd. to the Indian firm, it was announced here on Wednesday.
Both companies issued a joint statement to announce Nissan's exit from the three ventures.
The two companies have entered into a new agreement, whereby Ashok Leyland will continue to roll out light commercial vehicle models 'Dost' and 'Partner' under a licence from Nissan.
The two models are based on Nissan Motor's design, engineering and technology.
"Servicing and parts availability for customers will be ensured by a technical support arrangement. In addition, the two companies have agreed to continue a deal to procure Made in India parts to Nissan," the statement said.
"We are pleased to be moving forward into a new phase of our business with Ashok Leyland," Philippe Guerin-Boutaud, Nissan corporate vice-president in charge of the Global LCV Business Unit, was quoted as saying in the statement.
"Under the licensing arrangement with Ashok Leyland, the Indian commercial vehicle customers can continue to benefit from Nissan's engineering, wherein servicing and parts availability will also be ensured," he added.
"We have decided to acquire Nissan's stake in the three joint venture companies, and this will help focus our efforts to concentrate on our core business initiatives and our customers. We will continue our relationship with Nissan under the new arrangement," Vinod Dasari, Managing Director of Ashok Leyland, was quoted as saying.
However, the joint statement is silent on the enterprise valuation of the three joint ventures and the price Ashok Leyland -- a listed entity -- will pay Nissan for its stakes.
The first joint venture was for the manufacture of LCVs under Ashok Leyland Nissan Vehicles Pvt. Ltd., in which Ashok Leyland owns 51 per cent share while Nissan owns the rest.
The other two joint ventures are Nissan Ashok Leyland Powertrain Pvt. Ltd., the powertrain manufacturing company, owned 51 per cent by Nissan and 49 per cent by Ashok Leyland; and Nissan Ashok Leyland Technologies Pvt. Ltd., the technology development company, owned 50:50 by the two partners.
In February, Nissan Motor had sent a sent a notice to Ashok Leyland Ltd. to terminate its technology development joint venture Nissan Ashok Leyland Technologies Pvt. Ltd. over non-payment of royalty.
The termination notice was issued soon after Ashok Leyland sent a legal notice to Nissan Motor for using the equipment owned by another joint venture company to roll out cars instead of the LCVs.
Ashok Leyland had turned out four vehicle models from its partnership with Nissan -- Dost, Mitr, Partner and Stile -- while for Nissan it was only Evalia.
While Nissan put a halt to Evalia manufacture, Ashok Leyland stopped production of Stile later as the vehicle was not doing well in the market. However, Dost has been doing well for Ashok Leyland.
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