The Hindu Business Line : `Nissan plans $500-m India plant'

Mr Carlos Ghosn, CEO of both the companies, who is also credited with turning around the once ailing Japanese company, is constantly exploring ways by which manufacturing synergies can be leveraged for the alliance.

Late last year, on behalf of Renault he announced 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.

While making this announcement, Mr Ghosn had said 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. (He was speaking about the possibility of stepping up the new greenfield plant's capacity to locally produce Nissan cars for India.)

However, Mr 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.

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