hopes of setting up a small car assembly unit with Japanese
major Nissan may have come unstuck with the proposed
car manufacturing JV between French auto giant Renault
and domestic major Mahindra & Mahindra. Nissan is
44-per cent owned by Renault and industry observers
believe the company would prefer to join the Renault-M&M
alliance rather than teaming up with Suzuki Motor and
its Indian subsidiary Maruti.
there were no formal official confirmations, Nissan
and Suzuki were in discussions to set up a new small
car plant in India. As Suzuki's Indian arm, Maruti was
expected to represent Suzuki in the venture to assemble
cars under both Nissan and Suzuki badges for both domestic
and export markets. Industry analysts believe these
talks ran into difficulties after disagreements over
and Renault have just announced a new venture to set
up a new auto plant to manufacture up to 5 lakh units.
The plant would be set up in five years and is expected
to cost around $1 billion. The investment would be shared
equally between M&M and Renault, but Renault is
expected to rope in Nissan also - even if at a later
new M&M-Renault plant would manufacture both Mahindra
and Renault vehicles. The partners are also planning
engine and transmission plants and the site would be
identified soon. Mahindra and Renault already have a
51:49 JV to manufacture the low-priced Logan sedan,
which is expected to be launched by early next year.
the proposed venture is an integrated engine-transmission
and assembly unit operation with flexibility to produce
multiple models, it makes some sense for Nissan to go
with M&M-Renault rather than an alliance with Suzuki
for the new plant. By joining the M&M-Renault alliance,
Nissan would have access to sufficient capacity without
heavy financial commitments.
the strategy it appears as if Nissan is not looking
at heavy volumes from the Indian market and may stay
out of the highly competitive domestic small car segment
- at least in the initial years.
currently has only one model, the SUV X-Trail in India.
The company is importing the model as a fully built
unit, which makes it very uncompetitive in terms of
price. Nissan has sold only around 250 units of the
X-Trail in the domestic markets so far this year.
it is expected that Nissan would continue its production
alliance with Suzuki for small cars. The two companies
have a separate agreement under which Suzuki would manufacture
small cars for Nissan - mostly for the European market.
Nissan and Suzuki already share production facilities
in Japan by supplying vehicles under each other's brands
and there was some speculation that Nissan is eyeing
a large stake in Suzuki.
had announced in June this year that it would supply
Nissan from Maruti's assembly units in India. Maruti
had also announced that it would further expand capacity
at its soon-to-be commissioned Manesar plant to 2.5
lakh units per annum to cater to Nissan as well.