The Nissan Motor-Ashok Leyland tie-up took a further beating over the weekend with Nissan sending a notice terminating a technology development relationship.

This follows on the heels of Ashok Leyland dragging Renault Nissan Automotive India Pvt Ltd to court over use of equipment at RNAIPL plant to make cars instead of Light Commercial Vehicles.

Senior executives at Ashok Leyland declined to comment on the development.

An official statement from Nissan Motor said: “We are working with Ashok Leyland for a mutually agreeable solution. We have no further comments on the subject.” 

The termination notice effectively marks the end of the Nissan Ashok Leyland Technologies Pvt Ltd, an equal joint venture for technology development for commercial vehicles.

According to reliable sources, Nissan had decided to terminate the agreement because Ashok Leyland “had not paid royalty to Nissan for technology usage. It’s been a while since they paid annual royalty.” Nissan has also asked suppliers to stop deliveries to the technology joint venture.

The sources said Ashok Leyland had been the only beneficiary in the partnership. It developed four vehicles – the Dost LCV; Partner, a 4-tonne truck; and Mitr, an LCV bus, with technology entirely from Nissan. The Stile, a passenger vehicle and its Nissan counterpart Evalia, are not under production.

Gopal Mahadevan, Chief Financial Officer, Ashok Leyland, in a recent interaction with media persons had said that the production of Dost, its biggest success segment, will not be affected. He declined to comment further about the partnership as the issue was sub-judice.

On the rocks

The sources said the relationship has been on the rocks for sometime and Nissan had hoped the partners could settle the issue between themselves. But Ashok Leyland had caught Nissan Motor by surprise when it sent the legal notice last week against RNAIPL, which has the car manufacturing plant at Oragadam near Chennai, and Ashok Leyland Nissan Vehicles.

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