The Hinduja Group owned Ashok Leyland may not pursue its compact car project any further. Autocar India has learnt from a senior Hinduja Group executive that Ashok Leyland intense competition in the compact car segment has deterred the commercial vehicle major to dabble in that segment. Instead the group is now learnt to be scouting for new opportunities of business from the aviation industry. Hindujas owned Defiance technologies is scouting for a partnership or acquisition in this space, and an announcement in this regard may come in 3-4 months.

Ashok Leyland and Nissan -- its partner for LCVs, had earlier announced their intent to explore the possibility of developing and building a compact car for India. However, Nissan can still tap Defiance Technologies as an OEM customer, to avail its services in developing the small car.

Ashok Leyland’s decision to stay away from the car business may be a wise move, as it is preparing to enter an increasingly competitive segment of light commercial vehicles with its LCV Dost. It would rather utilize its resources to get a foothold in a business which is an extension of its core M&HCV business, rather than venturing into a new territory altogether.