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As Stand-off Builds, Ashok Leyland Denies Owing Royalty to JV Partner Nissan

Published On Feb 23, 2016By Lisa Pradhan

In the year 2007, Ashok Leyland entered into a joint venture with the Japanese auto maker, Nissan with a focus on making light commercial vehicle. Two other areas were also tapped into by the JV, namely technology development and engine manufacturing. As part of the agreement, Nissan made use of Ashok Leyland's manufacturing facility in Chennai and shared it with its partner Renault. Over the past few months, the collaboration between these two automobile giants came to a rough stage, with the Chennai based company releasing legal notices to Nissan over equipment issues.

Recently, the tech arm of the joint venture moved to the Bureau of Industrial & Financial Regulation (BIFR) asking for help over massive accumulated losses. The business reportedly piled up a net loss of INR 170 crores.

Mounting losses and a greatly negative response had led to an increasingly strained bond between the two brands. Over the past few years, most of the LCV models released by the JV had hit a concrete wall, and many had been pulled out of production. The relationship between the brands came to an icy standoff just off late: Ashok Leyland accused Nissan of misusing the Chennai factory, meant to be a hub for their joint venture model production. The company dragged the Japanese giant to court over the issue, following which Nissan sent a termination notice to the other.

As the partnership drifted towards a break-up, reports have emerged off late that Ashok Leyland denies owing royalty sum to Nissan. In a statement the Indian truck maker said, “We wish to clarify that Ashok Leyland does not owe any royalty to Nissan. One of the JV companies, Nissan Ashok Leyland Technologies Limited (JV Company) owes a minor sum of INR 2.34 crore to Nissan Motor Company (Nissan) as royalty.”

See Also:

Ashok Leyland Drags Joint Venture Partner, Nissan, to Court

Rocky JV between Nissan and Ashok Leyland to Come to an End

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