The Hindu Business Line : Mahindra-Renault-Nissan car facility near Chennai

JOINT DRIVE: (From left) Mr Keshub Mahindra, Chairman, Mahindra Group; Mr Patrick Pelata, Executive Vice-President, Renault; and Mr Carlos Tavares, Executive Vice-President, Nissan, at a press conference in Chennai on Monday. — Bijoy Ghosh

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Chennai Feb. 26 Mahindra & Mahindra, Renault and Nissan today announced a joint venture to produce cars at a new plant near Chennai, at an investment of Rs 4,000 crore.

The plant, which will produce models for all the three partners, will have a capacity to produce 400,000 cars and utility vehicles, as well as power train for Renault and Nissan, officials of the joint venture said at a press conference here today.

Equity capital

While Mahindra & Mahindra (M&M) will hold half of the equity capital of the yet-to-be-christened joint venture company, Renault and Nissan will share the balance, most probably equally.

The joint venture will be limited to manufacturing; while the Mahindra-Renault models will be distributed through M&M's network, Nissan will set up its own marketing channel, Mr Rajesh Jejurikar, Managing Director, Mahindra Renault, said.

Phase I capacity

The plant is to come up on a 1,100-acre land at Oragadam, south of Chennai, (not far from the Hyundai car plant) and Phase I with a capacity of 4,00,000 vehicles will be commissioned by the second half of 2009, officials said.

Land acquisition would be completed and land handed over to the joint venture company in two months, according to Mr Shaktikanta Das, Tamil Nadu Industries Secretary.

M&M does not have plans to produce passenger cars of its own — it will use the facility to manufacture utility vehicles. Dr Pawan Goenka, President, Automotive Sector, M&M said at the press conference that cars developed under the `Ingeno' project would not be produced here.

However, the joint venture of M&M and Renault, which plans to produce Renault's Logan cars at Nashik, Maharashtra, will use the Oragadam facility to manufacture other passenger cars on the Logan platform, Mr Patrick Pelata, Executive Vice-President, Renault Group Plan, said.

The Japanese carmaker Nissan (in which Renault has a 45 per cent stake) will produce compact cars in the `B' and `C' segments here, Mr Carlos Tavares, Executive Vice-President, Nissan said.

The vehicles produced by M&M as well as the joint venture of M&M and Renault will be sold through the distribution network of M&M. Cars of Nissan badge will be marketed by Nissan independently.

Mr Shaktikanta Das signed the agreement with Dr Goenka, Mr Pelata and Mr Tavares, in the presence of Mr M. Karunanidhi, Chief Minister, Mr Keshub Mahindra, Chairman, Mahindra & Mahindra, and others.

A State Government press release said that the project would also involve manufacture of 50,000 tractors.

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