Nissan, Ashok Leyland to delay India truck output

Japan's Nissan Motor Co said on Tuesday it would delay the start of light commercial truck production with Indian partner Ashok Leyland Ltd by six months to as late as September 2011 in view of plunging truck sales in India.

The joint venture had been planning to begin production during the business year starting in April 2010, with 80 percent of output slated for sale domestically. The plant is due to be set up in Pillaipakkam, near the southern city of Chennai, with an initial capacity of 100,000 units a year.

Truck demand in India, the world's fourth-largest market for commercial vehicles, had been expected to grow on the back of improving roads and a focus on infrastructure. But a slowing economy has resulted in a liquidity crunch and a sharp drop in construction activity, squeezing demand in recent months. Heavy truck sales at Ashok Leyland, India's second-biggest bus and truck maker, slumped 67 percent in November, and those at top-ranked Tata Motors Ltd slid as much as 60 percent. Both have taken steps to reduce production to avoid a buildup of inventory, with Tata shutting its plants for up to six days last month.

A spokesman at Nissan, Japan's No.3 automaker, said other projects in India, including the joint venture with French partner Renault SA and India's Bajaj Auto Ltd to sell a $2,500 car from 2011, would go ahead as planned.

Shares in Nissan gained 4.9 percent to 319 yen in morning trade in Tokyo, outperforming a 0.5 percent rise in the Nikkei average .N225.

Views:0