Japanese auto major Nissan Motor and truck maker Ashok Leyland have stepped up planned investment in their 3 new JV companies by USD 75 million to USD 575 million. Seven months ago, the two companies had announced their plan to invest USD 500 million in vehicle manufacturing, power train manufacturing and technology development in India.

The enterprise will involve a capacity of 100,000 vehicles in the first phase, to be scaled up subsequently. The plant is expected to start production from 2010-11. Among the 3 platforms identified, covering applications up to 7.5 tonne gross vehicle weight is an all new generation Nissan Atlas F24 light duty truck. Additionally, an all new engine is being developed specifically for LCV applications, as part of the range of EUR 3 and EUR 4 compliant diesel engines.

Mr Andy Palmer corporate VP of Nissan Motor said that the additional USD 75 million will be invested in tooling for the first range of products and R&D. Considered one of the most expensive items in a manufacturing plant, the investment in tooling could launch radically designed vehicles into the market.

Terming the association with Ashok Leyland as one huge advantage due to its local knowledge in knowing customer needs, Mr Palmer said that the challenge is to maintain quality and offer right products at right price points. He added that "India is a massive, expanding market providing good opportunities for growth. The changes in its transportation system and the hub and spoke distribution model are putting the venture in the front of the wave."

Mr R Seshasayee MD of Ashok Leyland said that "The current growth plans of Ashok Leyland involve, not only our stated capacity additions and new product launches but also, with this important step, our entry into the fast growing LCV segment. The balanced JV structure facilitates meaningful contribution from both partners and the best opportunity to leverage their respective strengths."