The two companies announced a binding deal that incorporates tentative agreements reached between the two companies in August to set up three separate joint ventures for small trucks and other light commercial vehicles (LCVs).
Nissan and Ashok Leyland plan to initially invest about US$500 million (US$1= RM3.34) in the three joint ventures, which include a vehicle manufacturing company, an engine and component making facility and a technology and product development centre, the statement said.
"The LCV business is one of Nissan's most important global growth engines. This agreement accelerates our LCV business in India and lays the foundation for further growth through exports," Carlos Ghosn, president and chief executive officer of Nissan, said.
"We see India emerging as an important hub in Nissan's global LCV manufacturing footprint," Ghosn said.
Ashok Leyland will own a majority stake, 51 per cent, in the vehicle manufacturing company, which will start production in 2010.
It would eventually make at least 100,000 vehicles annually for sale in India and exports, including the Atlas F-24, a new generation small truck from Nissan, the statement said.
The decision to formalise the deal was based on a detailed evaluation of the projects proposed in the August agreements, both companies said.
Nissan will have majority stake in another joint venture that will manufacture and assemble engines and other com ponents for LCVs, it said.
The third venture will focus on developing technology and small trucks and mini buses for India and other emerging markets. It will be equally owned by the two companies.
The deal underscores Nissan's growing interest in India, where demand for automobiles is rising fast thanks to robust economic growth.
