Nissan Motor Company has told Ashok Leyland it is ending its 50-50 technology development joint venture Nissan Ashok Leyland Technologies due to non-payment of royalties, according to Indian media reports.
An IANS report published by the Economic Times of India said the termination notice came after Ashok Leyland sent a legal notice to Nissan for using the equipment owned by another joint venture company to build cars instead of light commercial vehicles (LCV).
"It is true that we have issued a legal notice to Nissan. As the matter is sub-judice, I cannot comment further," Ashok chief financial officer Gopal Mahadeven was quoted as saying.
Commercial vehicle specialist Ashok Leyland has three joint ventures making light commercial vehicles and powertrains while the third is the technology development company.
Nissan has sent its termination notice for scrapping the joint venture Nissan Ashok Leyland Technologies.
A source told IANS Nissan decided to exit that joint venture as Ashok Leyland had not paid royalties.
The report added Nissan had also decided to stop supplying parts and other assistance to the Ashok Leyland LCV JV which, at one point was making Dost, Mitr, Partner and Stile vehicles for Ashok and the Evalia for Nissan.
Nissan ended Evalia output and Ashok Leyland later stopped Stile production, due to low sales but the Dost sold well for Ashok.
IANS/ETI's source said Nissan wanted to settle the LCV JV issues amicably but was surprised to receive the legal notice from Ashok Leyland relating to the technology joint venture.
Senior Ashok Leyland officials would not respond to IANS queries.
"We are working with Ashok Leyland for a mutually agreeable solution. We have no further comments on the subject," a Nissan spokesperson told IANS by email.