Indian commercial vehicle manufacturer Ashok Leyland said on May 15th that its joint venture with Japan's Nissan for light trucks has been delayed by 6 months, due to the economic slowdown and delay in land acquisition.

Production from the venture is expected to start in 2011, the company said in a statement, while announcing its results for the fourth quarter.

The two companies were also debating optimal use of investments by making use of their existing facilities. "The two partners are also evaluating the possibility of enlarging the product range in the manufacturing plan, including some additional products from Nissan's global portfolio of light commercial vehicles," the release said.

These were initially slated to be produced outside India. The investment in the project is still being decided, Chief Financial Officer K. Sridharan said.

For the quarter to March the company's net profit fell about 70 per cent to Rs. 533.2 million (US$ 10.8 million), while sales fell 52.5 per cent to Rs. 12.2 billion. During the quarter the company's profitability was helped by gains made due to new accounting norms for foreign exchange currency translations and accounting for cash flow hedges.

The slowdown in economic activity led to a shift away from heavy trucks and higher capacity vehicles, in which Ashok Leyland has a significant presence. "We are still not seeing a revival happening...but I think it has bottomed out now," Sridharan said.

"For our country, the worst seems over. For the industry, demand for medium and heavy commercial vehicles can swing in single digits in the current year - the upward swing predicated upon a stable, progressive and responsive government at the Centre", Managing Director R. Seshasayee said in the statement.

Industry data shows that sales of trucks and buses have been harder hit by the downturn, falling 26 per cent in 2008/09. The company has scaled down its capital expenditure plan for 2009/12 to Rs. 20 billion from its original Rs. 30 billion.