Japanese car maker and Ashok Leyland have announced that them teamed up for the production of pickup trucks and other light commercial vehicles in India and are still looking for partners in sale and distribution. Nissan President and Chief Executive Carlos Ghosn said in a statement, “Our LCV business and overall expansion into India represents two of the biggest growth opportunities for Nissan in the medium and long term. This latest investment will broaden our coverage of this market in addition to providing new LCV products for emerging markets.”

Shares of Ashok Leyland rose 4% to 37.65 rupees (91 cents) on the Bombay Stock Exchange Wednesday.

The two companies will make three joint ventures for vehicles, the manufacturing of powertrain and development of technology. They will manufacture approximately 100,000 vehicles yearly in the medium term and including for export. The domestic light commercial vehicle market made a compound annual growth rate of around 12.5 percent during the past five years. The present production in the LCV segment across the board is estimated at 160,000 units.

Tata Motors leads the commercial vehicle arena overall. Ashok Leyland has a 30% market share of the medium and heavy vehicle segments. But it has only 2% of the light commercial vehicle market because of a lack of competitive products, analysts say.

Merrill Lynch analyst S. Arun said in a research note, “This is the most significant of the recent developments for Ashok Leyland.” He added that it would “eventually plug the gap of the company’s absence in the light vehicles segment.” However, for the meantime,. He expects the business prospects to remain unexciting and has a sell rating.

The Managing Director for Ahok Leyland, R Seshasayee said that the company wanted to widen its portfolio and the 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.”

Nissan already has a joint business enterprise with tractor maker Mahindra and Mahindra and Renault in the auto market in India, where it manufactures no-frills Logan sedan. The three companies are setting up a production plant in Southern India, in the city of Medras. This plant has the capacity to manufacture around 400,000 units of vehicles.

Ghosn has mentioned earlier this year that he planned to produce a small car that priced around $3,000 for the growing middle-class consumer base here.

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