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India to have a $500 million plant from Nissan
By siliconindia
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Tuesday, 02 January 2007, 18:30 IST
Chennai: Renault of France and Nissan Motor Co. of Japan have shown positive growth with a unique practical alliance. The companies have cross-holdings in each other.
The CEO of both the companies, Carlos Ghosn, credited with turning around the once ailing Japanese company, last year announced on behalf of Renault The extension of the French company's partnership with Mahindra & Mahindra.
The two partners were to set up a new equal equity joint venture plant where derivatives of the Renault Logan would be manufactured. This would be in addition to the contract manufacturing arrangement between M&M and Renault for the Logan sedan.
The new plant would have an initial production capacity of three lakh cars a year and be operational by 2009, with capacity eventually peaking at five lakh cars by 2012. The initial investment for the plant would be in the range of 50 to 60 billion yen ($ 420 to $ 500 million). Production will mostly center on a new compact car with an engine displacement of around 1000cc. About one-third will be sold in India, and the rest will be exported to Europe and other regions.
The location of the plant is to be finalized in one months time. Two or three ports cities in the West and South have been short-listed for the site.
Ghosn informed that Nissan was also considering joining this alliance and use the new manufacturing facility for producing its cars for both the Indian and export markets.
However, Ghosn had also said that the decision would have to take into account the issue of Nissan's intentions to integrate the Indian operations with its global plans, the attraction being the potential for low-cost manufacturing in India.
The latest announcement from Nissan is, however, unclear about whether the company will take the alliance route, co-invest its own funds and manufacture along with the M&M-Renault joint venture, or whether the investments will be routed into a separate, new wholly owned subsidiary and greenfield plant.