Ashok Leyland has announced that the Company has signed a Heads of Agreement with Nissan Motor Co. Ltd, Japan for development, manufacture and marketing of LCV products.

The Company and Nissan Motor Co on August 29, 2007 signed a Heads of Agreement (HoA) for the formation of three joint venture Companies supporting the Light Commercial Vehicle (LCV) business. This first stage of the partnership between the Companies will include the development, manufacture and cooperation for distribution of LCV products under both the Company and Nissan brands. These are subject to various corporate and statutory approvals from both sides.

The three joint venture Companies detailed in the HoA are to cover the following business areas:

Vehicle Manufacturing Company - a Company with exclusive rights to manufacture LCV products in India for both the partners. Manufacturing facilities will be located in India and the Company will be majority owned by the Company. In the medium term, production volume (for Indian and export markets) is expected to be above 100,000 units annually.

Powertrain Manufacturing Company - responsible for the manufacture and assembly of engines and other drivetrain components to be fitted in the LCV products and for exports. Manufacturing will be located in India and the Company will be majority owned by Nissan Motor Company.

Technology Development Company - responsible for the development of LCV products and related powertrains, destined for the indian and identified emerging markets. This JV Company will be owned 50:50 by the two partners. The products developed will be sold under both the Company and Nissan brands.

In addition, the two partners are also studying cooperation in the area of sales and distribution. This includes providing access for Nissan to the Company's dealer network in India and for the Company to use Nissan dealer networks in identified export markets outside India.

Underlining the synergy, said Mr. Dheeraj G Hinduja, Co-Chairman of the Company, "Possibilities are immense, for a win-win collaboration, by bringing together Nissan's tradition of engineering excellence with Ashok Leyland's intimate knowledge of the market and cost efficient value addition in India."

Said Mr. R Seshasayee, Managing Director of the Company: "Ashok Leyland has been consolidating its growth in Medium and Heavy Commercial Vehicles even while exploring suitable opportunities to expand the total product portfolio. This partnership with Nissan, renowned for their product engineering and a wide range of LCV products, will allow Ashok Leyland to expand into the fast growing LCV segments in India. We look forward to harvest the full potential of the two organizations."

Following the signing of the HoA, both Companies will now embark on a detailed feasibility study covering all proposed areas of cooperation. This study will lead to the signing of a Memorandum of Understanding and the subsequent formation of the legal partnership. This study is expected to conclude by October 2007.

Nissan Motor Company's global operations Include automotive styling, engineering, consumer and corporate financing, sales and marketing, distribution and manufacturing. Since its establishment in 1933, Nissan has gained confidence and trust of customers around the world through its distinguished design and quality of its automobiles not only Japan but also in the United States, Europe and other markets of the world Nissan currently has manufacturing sites in Japan, United States, United Kingdom, Spain, Mexico, China, South Africa, Thailand, Egypt, etc. and the sales volume of Nissan brand vehicles in the world for the fiscal year 2006 exceeded 3.5 million vehicles. Nissan currently employs 182,273 people worldwide.

Nissan also manufactures, Sells and distributes the luxury line-up under the Infiniti brand in the United States, GCC, Taiwan, Korea, China and Russia. Nissans presence in the world is even more enhanced through the Renault-Nissan Alliance that was established in 1999 with the view to create synergies in any part of the world.