India’s second largest commercial vehicles manufacturer, Ashok Leyland (ALL), is in talks with its technology partner Iveco over entering the Chinese market via a joint venture.
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The UK based Hinduja family (owners of a 51% stake in ALL) and Iveco were recently reported to have signed a new shareholders agreement. This reportedly will enhance the co-operation between ALL and Iveco for the future development of new technology and expansion into new markets.
Last year ALL, announced its intention to enter the Chinese market by March 2005 while Iveco intends to further its presence there.
Iveco currently operates in China through two joint ventures: one with Yuejin Motor Group that manufactures light commercial vehicles and gearboxes and a second, Changzhou Bus Corp, that produces buses, coaches and chassis. This business currently produces annual revenue of about €10 billion for Iveco.
The China Auto Policy 2004 calls for huge investments and, because Iveco already has two joint ventures, it is clear that the Italian commercial vehicle maker would start new ventures with a partner.
Because Iveco specialises in medium-size and heavy commercial vehicles, ALL, with core competence in the same segment, is a likely partner.
According to the new agreement, Iveco and ALL will also jointly explore opportunities in Iran and Russia and extensively share technology in the future.
Ashok Leyland recently signed a $US10 million agreement with GIAD Auto, the Sudan Government’s vehicle assembly unit, to supply Stallion 4X4 army trucks and Falcon buses to the Sudan defence ministry.
Deepesh Rathore / Tilak Swarup
