Ashok Leyland hits a pothole

Nissan and Ashok Leyland has a 8-year JV and last year, it hit a big pothole. The JV is now off with differences arising over platform-sharing, design and manufacturing fail. The JV was for the manufacture of LCVs like vans and small trucks soured though it has been making consistent losses. In FY15, the company wrote off Rs.214 crore as impairment charges on the value of its investment in the JV.

Yesterday, Nissan issued a termination of licence notice to one of their three JV companies, sounding a formal closure to its JV. Those in the industry say that dispute began for as paltry a sum as Rs.2.34 crore, to be paid as royalty by Leyland to Nissan.

Naturally, with all this happening, the stock price is today down in the red, almost 2.5% down at Rs.90 which is closer to its 52-week high of Rs.99.65 than the low of Rs.63.85.