The Hindu Business Line : Nissan, Renault sign MoU with TN for car project

Mr Carlos Tavares , Executive Vice-President, Nissan Motor Co Ltd (right), and Mr Colin Dodge, Senior Vice-President, Nissan Motor Co Ltd, at a press conference in Chennai on Friday.

— Bijoy Ghosh

Mr Patrick Pelata , Executive Vice-President, Product & Strategic Planning and Programs, Renault Group, and Mr Sylvain Bilaine, Managing Director, Renault India, at a press conference in Chennai on Friday.

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Chennai, Feb. 22 Global car majors Nissan of Japan and Renault of France today jointly signed an MoU with the Government of Tamil Nadu to develop an integrated greenfield car plant at Oragadam, about 50 km from here.

A year ago the two companies along with Mahindra & Mahindra (M&M) announced a tripartite joint venture with the latter holding 50 per cent and the rest shared by the two overseas alliance partners.

With the Indian partner’s “priorities having changed”, to focus more on the product lines it had been in, it severed its ties. Hence, Nissan and Renault are taking the show forward.

Globally, Renault and Nissan are partners — Renault has 44 per cent stake in Nissan, while the Japanese company holds 15 per cent of Renault.

In the Indian project, both the partners will hold equal share in the company that is yet to be named and have agreed to invest Rs 4,500 crore to create a manufacturing facility with an installed capacity of 4 lakh vehicles per year. Commercial production is expected to commence in 2010. The new facility would provide employment to about 4,000 people. They expect about 50 vendors to set up shop in the neighbourhood of the car plant.

The plant will have two manufacturing lines, one for each partners to make 2 lakh cars each. However, some capital-intensive manufacturing such as for power trains and stampings, will be common.

Nissan’s plans

Speaking to the media after the MoU signing ceremony, the Executive Vice-President of Nissan Motor Company Ltd, Mr Carlos Tavares, said Nissan would make four models in the new plant and distribute them through a proposed joint venture distribution company.

Nissan is looking for a partner for the joint venture.

Both companies have indicated that they would make compact cars, aiming for volumes. Eventual local content will be upwards of 80 per cent.

Renault’s plans

Renault would make five models in the Chennai plant and distribute them through its joint venture company with M&M – Mahindra Renault India Ltd, the company that makes the ‘Logan’ car. Fifteen per cent of the production will be exported.

The Executive Vice-President (Product & Strategic Planning and Programmes) – Renault Group, Mr Patrick Pelata, said, “all the cars manufactured by Renault at the Chennai plant will have the ‘Mahindra Renault’ badge.” To a question if there is a possibility of M&M getting back into the joint venture, he said the re-entry option was open.

More Stories on : Cars | Alliances & Joint Ventures | Tamil Nadu

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