Leyland-Nissan JV to export 20 pct of total output

MUMBAI (Reuters) - The joint venture of Ashok Leyland Ltd and Nissan Motor Co is on track to start production of light trucks in 2010/11, with exports making up a fifth of total output, the companies said on Monday.

The venture for light trucks, signed in May this year along with those for powertrain manufacture and technology, will set up a plant in Pillaipakkam near the southern city of Chennai with an initial capacity of 100,000 units, they said.

"The joint venture with Nissan is a major step in our plans to be a full range player and we are confident that we can meet our production targets," R. Seshasayee, managing director of Ashok Leyland, said in a statement.

The Leyland-Nissan ventures had committed to investments of about 24 billion rupees ($538 million), with plans to build a new range of trucks for the local and overseas markets.

Leyland, India's second-biggest bus and truck maker, will also invest in expanding its capacity for medium and heavy trucks, it said, as it seeks to more than double its capacity.

Combined investments will exceed 40 billion rupees, it said.

Leyland, which trails leader Tata Motors Ltd, will step up capacity at its facilities in Ennore and Hosur in southern India, as well as at a greenfield site near Chennai, for engines, gear boxes, chassis and parts, it said.

The new facilities will create more than 4,000 jobs, and will get tax concessions for 21 years, it said.

Demand in India, the world's fourth-largest market for commercial vehicles, is expected to grow on improving roads and a focus on infrastructure.