Hinduja Group flagship Ashok Leyland and Nissan Motor Co., Ltd., announced the legal
formation of the three JV companies for the Light Commercial Vehicle (LCV) business in
India for vehicle manufacturing, powertrain manufacturing and technology development.
This follows the signing of the Master Co-Operation Agreement between the two companies
in October 2007.

The shareholding structures of the three joint ventures are as under:

• Ashok Leyland Nissan Vehicles Pvt. Ltd., the vehicle manufacturing company will be
  owned 51% by Ashok Leyland and 49% by Nissan;
• Nissan Ashok Leyland Powertrain Pvt. Ltd., the powertrain manufacturing company will be
  owned 51% by Nissan and 49% by Ashok Leyland;
• Nissan Ashok Leyland Technologies Pvt. Ltd., the technology development company will
  be owned 50:50 by the two partners.

The aggregate investment in all three companies will be around Rs. 23 billion (approx. 575
Million USD). The enterprise will involve a capacity of 100,000 vehicles in the first phase, to
be scaled up subsequently. The plant is expected to start production from 2010/11. Among
the three platforms identified, covering applications up to 7.5 ton Gross Vehicle Weight, is
an all-new generation Nissan Atlas F24 light-duty truck. In addition, an all-new engine is
being developed specifically for LCV applications, as part of the range of Euro 3 and Euro
4 compliant diesel engines.

Executive comments

Mr. R. Seshasayee, Managing Director, Ashok Leyland:

“The current growth plans of Ashok Leyland involve, not only our stated capacity additions
and new product launches but also, with this important step, our entry into the fast-growing
LCV segment. The balanced JV structure facilitates meaningful contribution from both partners
and the best opportunity to leverage their respective strengths.”

Mr. Carlos Tavares, Executive Vice President, Nissan:

“We made another important step in the creation of a solid structure that will allow Nissan
and Ashok Leyland to enter successfully the light commercial vehicle market in India and global markets. This represents an important embedded element in our new NISSAN GT 2012 plan
based on growth and trust.”

The Hinduja Group is an investment and banking group with a diversified global portfolio of
holdings across the manufacturing services and banking sectors. The Group, founded by
Shri P.D. Hinduja in 1914, has activities across three core areas: Investment Banking,
International Trading and Global Investments. As part of its Global investments, the Group
owns businesses in Automotive, Information Technology, Media, Entertainment & Communications, Banking & Finance, Infrastructure, Project Development, Chemicals & Agri business, Energy,
Real Estate and Healthcare. The Hinduja Group also supports charitable and philanthropic
activities across the world through the Hinduja Foundation.

Ashok Leyland is the flagship of the Hinduja Group and a leading manufacturer of commercial
vehicles in India with 07-08 turnover of more than US $ 2 billion. With six manufacturing locations
at Chennai, Hosur (three plants), Alwar and Bhandara, the Company has an annual production capacity of 84,000 vehicles with additional 100,000 vehicle capacity planned by 2010. The
Company has associate companies in the Czech Republic and the UAE and joint ventures
in Sri Lanka and Bangladesh, besides exports to over 20 countries worldwide.

Nissan Motor Company generated global net revenues of 10.824 trillion yen in 2007. Nissan
is present in all major auto markets worldwide selling a comprehensive range of cars, pickup
trucks, SUVs and light commercial vehicles under the Nissan and Infiniti brands. Nissan employs
over 224,000 people worldwide.

The Nissan GT 2012 five-year business plan is focused on the company’s long-term performance combined with its responsibilities to stakeholders as a significant global business. The three commitments are:

• Quality leadership
• Zero-emission vehicle leadership

The Petroleum Ministry’s decision to hike the oil price will not have any particular impact on a
section of automobile users  the owners of LPG-run vehicles.

The price of auto-LPG in the country is not subsidised by the Government and is being governed
by international prices, said Mr Suyash Gupta, General, Indian Auto LPG Coalition (IAC), industry
body of auto-LPG suppliers.

Although the auto-LPG, is not being subsidised, its price/litre remains about Rs 15 lesser than
petrol, while it is almost equal to or a little less than that of diesel in many Indian cities. The
auto-LPG users are still in an advantageous position due to the substantial gain in running
cost resulting from better fuel efficiency. The running cost is cut down up to 60 per cent, says
the IAC Web Site.

According to the industry estimate, the number of authorised LPG kit-fitted vehicles in the
country grew to 5 lakh as on March 31, 2008. According to the latest figure available with
the IAC, the auto-LPG consumption in the country surged to 2,75,000 tonnes in the last fiscal
against 2,00,000 tonnes in the previous year. The network of auto-LPG filling stations grew
to 560, covering more than 250 cities.

“The non-availability of LPG is no more a reason for not shifting to the alternative fuel. The
network of auto-LPG filling stations has expanded into non-metro centres and small towns
across the country,” said Mr Gupta.

Manufacturers enthused

The growth in auto-LPG seems to have enthused automobile manufacturers. All major vehicle
makers have plans for coming out with more factory-fitted LPG-run vehicles. Currently, 50,000
vehicles have factory-fitted LPG kits while the number of retrofitted vehicles is nine times higher.

After the success of LPG-run Omni and Wagon-R Duo, Maruti Suzuki is launching the LPG version
of M800 this month. Hyundai will launch LPG-Santro and Accent, while planning to launch an LPG variant of i10 next year. “The fuel price hike has dampened the automobile market. Within that, alternative fuel-run vehicles will have certain demand. We hope that the launch of LPG variants
of Santro and Accent would help us overcome part of this crisis,” said Mr Arvind Saxena, Senior
Vice-President, Hyundai Motors India.

Tata Motors launched LPG-Indica a fortnight ago. Bajaj has announced that other than the
LPG-run Platina, the company would launch one more gas-run motorbike this year. The company produces LPG-run three-wheelers. LPG variant of Mahindra-Renault Logan will also hit the market soon.

“The success of Wagon R Duo has proved that there is a huge market for vehicles fitted with
LPG kits. As LPG becomes more available we are sure to see more OEM’s launching their LPG
variants. Rising cost of fuel is another factor. We could see as much as 10 per cent of all new
cars coming fitted with LPG/CNG fuel systems in the next three-five years,” said Mr N.K. Minda, Managing Director of Minda Auto Gas, the company that provides LPG kits to OEMs including
Maruti Suzuki.

India's auto sales rose for the second consecutive month in May from a year earlier but
analysts cautioned that rising input costs, inflation and high interest rates could put pressure
on the sector in fiscal 2008-09.

Over the last year, lending rates in the Indian banking system have increased considerably,
leading to a marked slowdown in the demand for commercial vehicles and passenger cars,
brokerage India Infoline said in a note.

With inflation reaching new highs, interest rates are not expected to decline in the near-term,
which could lead to a further slowdown in demand. A hike in fuel prices would also impact
demand negatively, the brokerage added.

India's largest car maker Maruti Suzuki India Ltd., a subsidiary of Suzuki Motor Corp., said May
sales including exports rose 16.2 percent to 69,001 units on higher domestic sales of its A3
and multi-utility vehicle (MUV) segments. Maruti's MUV sales rose 621.6 percent to 736 units.

South Korea's largest automaker Hyundai Motor Co.'s India unit Hyundai Motor India Ltd. said domestic sales rose 47.3 percent on higher exports. The company, which is India's second-
largest car maker and largest passenger car exporter, said May sales rose to 40,261 units
including the 15,751 cars it exported during the month.

The country's largest automobile company Tata Motors Ltd.'s sales grew 9 percent to 46,339.
Tata Motors sold 23,682 units in commercial vehicles and 19,234 units in its passenger car
segment while exports dropped 20 percent to 3,423 units.

Tata Motors also said it has raised prices of its passenger vehicles, effective Monday, between
1 and 3 percent due to the unrelenting increase in input costs.

General Motors Corp.'s unit GM India said May sales rose 7 percent to 5,789 units from 5,432
units in the year-ago period.

The fear of an impending increase in fuel prices, rising interest rates and threat of a global
recession are constraining the growth of India's auto sector. The market is also worried by the
steady rise in inflation which has lead to a surge in input costs for all manufacturers, said P
Balendran, vice president, GM India.

Volkswagen AG subsidiary Skoda Auto's unit, SkodaIndia, said May sales rose 122 percent,
mostly due to a base effect to 1,802 units from 810 units last year. During the month it sold
752 units of its newly-launched hatch 'Skoda Fabia'.

MUV maker Mahindra & Mahindra Ltd. said May sales, including exports, rose 16 percent to
20,653 units on the back of a 69 percent growth in exports. In the farm equipment segment,
M&M's domestic sales grew 29 percent to 11,879 units. M&M's May farm equipment exports
declined 9 percent to 684 units.

Mumbai-based brokerage Sharekhan said it expects fiscal 2008-09 to be a year of challenges
for M&M as the company's sales are likely to be affected by the increasing caution being exercised
by lenders after a rising number of delinquencies in the automotive and tractor segments.

In addition, Sharekhan expects the company's margins will come under pressure on account
of rising commodity prices.

Honda Siel Cars India, a joint venture between Japan's Honda Motor Co. Ltd. and Siel Ltd.,
said its sales in the January-May period registered marginal growth of 0.2 pct to 27,780 units.

However sales in May fell to 3,944 units from 4,811 units in the same period last year.

Two-wheeler makers reported a rise in May sales mainly due to a brisk response to their newly-launched models.

Hero Honda Motors Ltd., India's largest two-wheeler maker, reported a 9.54 percent rise to
312,317 units.

India's second largest two-wheeler maker Bajaj Holdings & Investment Ltd.'s total motorcycle
sales in May grew 7 percent to 180,935 units.

Bajaj, which will launch four new '125cc+' category motorcycles by September, said it expects commercial vehicle sales will rise during the second half on the back of two new products, one
each in the passenger and the goods vehicle segments.

TVS Motor Co. Ltd. reported a 4 percent growth in May sales. It sold 112,770 units, including
exports.

TVS will introduce two new scooters, based on Wimbledon designs, to coincide with the
forthcoming tennis season, after having already signed up with the All England Lawn Tennis
Club (AELTC) as a licensee.

Policy: Tata Motors` truck business may foot the bill for Nano loss

Tata Motors may charge the losses on its small car Nano, the world's cheapest car at Rs 1
lakh, against the profit it earns from selling trucks, according to industry analysts.

Chairman Ratan Tata has pledged to sell Nano, touted as the common man's car, at Rs
1,00,000 even though the cost of making and selling the car is expected to be higher because
of rising steel, battery and other input prices. Tata Motors has formed a team to evolve a plan
to keep the costs closer to the sale price.

"The challenge for Tata Motors is not to sell the car at Rs 1 lakh but to produce the car
substantially below the Rs 1 lakh barrier so as to be profitable. With the recent skyrocketing
increase in prices of raw materials it is next to impossible to maintain that limit. The company
will look to counterbalance the heavy initial loss on Nano by margin gain on the commercial
vehicle segment. The production numbers (of the Nano) will be considerably lower in the initial quarters", said a Mumbai-based auto analyst from one of the leading brokerage firm.

The car, which may be sold starting October, is expected to turn to profit in four years,
automobile analysts who declined to be identified said. The car will be built at Tata Motor's
plant in Singur, West Bengal.

The company intends to produce about 250,000 units of Nano's per annum in Phase I of
expansion with a gradual increase to 350,000 units per annum in Phase II.

Tata Motors' Managing Director, Ravi Kant declined to comment on if the company was
planning to set off the loss of margins on the Nano through commercial vehicles.

"For any new product development there are immense costs involved. The project of Nano
has never been tried earlier and hence the cost of development of the model will be more
than the cost of any other project.

In addition, with the kind of price hikes we have seen recently in input costs, its virtually
impossible to maintain the price at Rs 1 lakh", a city-based analyst said on the condition
of anonymity.

For the financial year ending March 31, 2008, the company sold more than 3.12 lakh
commercial vehicles (CV), witnessing a growth of almost 5 per cent, over the previous year
to that when it sold a little more than 2.98 lakh vehicles, according to the latest annual
release of the company.

Sales revenue for the company grew by 4 per cent, at Rs 33,093.93 crore for the same
period even as the company's passenger vehicle (cars and utility vehicles) segment reported
a fall of almost 4.5 per cent during the year.

Tata Motors will need to sell a large number of units of Nano to recover the cost of investment
analyst said. "Maruti Suzuki, India's largest car maker, produces 250,000 units of the Alto,
the highest selling model in India. The company has a net profit margin of eight per cent on
the model.