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Leyland shelves engine unit hive off plan

Anand Krishnamoorthy

NEW DELHI, Sept. 6

THE country's second-largest truck maker - Ashok Leyland Ltd - has shelved its plan to hive off its engine manufacturing unit at Hosur into a joint venture with Italy's Iveco, the company's Managing Director, Mr R. Seshasayee, said today.

``We don't need to do that anymore. That plan is off,'' Mr Seshasayee told Business Line.

Mr Seshasayee said Ashok Leyland is ``not going to push to form the joint venture'' as it has developed the necessary Euro-II engine technology on all other engine platforms (the Hino platform and the Leyland platform) as well.

Moreover, with the Hino engine becoming the largest power train for all Ashok Leyland vehicles, the company feels there is no need to form the joint venture with Iveco, Mr Seshasayee said.

``Also, we are in the process of stepping up our capacity for the Hino engines. Hence, there is no need to form the joint venture,'' he said.

Ashok Leyland was planning to hive off the engine unit last year into a joint venture with Iveco, the commercial vehicle unit of Italian auto giant Fiat SpA.

The Hosur unit would have acted as Ashok Leyland's part of the equity in the proposed joint venture. Iveco was to have held majority equity holding in the proposed joint venture.

Iveco is a shareholder and technology provider for Ashok leyland, whose 51 per cent shares are held by a London-based company - Land Rover Leyland International Holdings (LRLIH).

The UK-based Indian business family, the Hindujas, hold 70 per cent stake in LRLIH, while Iveco holds the rest.

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