Officials speaking to different States for new facility
Nissan may develop a compact sports utility vehicle (SUV) based on alliance partner Renault’s Duster platform, a model which has already amassed over 10,000 bookings in just the first month of launch.
Along with entry and midsize sedans, the SUV segment is expected to be a major focus area for the Japanese carmaker as it looks to become a mass player in India with a complete car portfolio.
Takayuki Ishida, MD and CEO of Nissan Motor India said, “We’re interested in the SUV market, and we need to have a good product. Globally, we have a lot of choice. But to arrive at a good price range, we would need to localise. Using the Duster platform is one of the options we are looking at.”
Nissan currently sells the premium ‘X-Trail’ in the SUV segment, prices of which start at Rs 22.6 lakh. But, the interest in cheaper, compact SUVs is highlighted by the fact that UV sales have grown 54 per cent to 1.62 lakh units between April and July this year.
To expand the UV range, the company will launch the ‘Evalia’ MPV by late September. After the Micra and Sunny, this will be the third to be manufactured at the Chennai alliance plant and the sixth model in its local portfolio.
Re-badging, or using same vehicle platforms across Group companies is not new for the Renault-Nissan alliance as it leads to considerable cost savings in product development. Common components and engine sharing creates a larger scale of manufacturing, leading to lower cost of production per vehicle and helping the company price products more competitively.
In the domestic market, Renault has already re-badged Nissan’s Micra hatch with minor modifications under the Pulse brand. Soon, Renault will also launch the ‘Scala’ sedan, which is basically a Sunny with minor design changes.
The Franco-Japanese alliance is also looking to expand production capacity, for which it may look at a new facility in a different state than Tamil Nadu. Preliminary talks have been held with Gujarat Government officials, sources said.
“From the Nissan headquarters some people came and talked to some local Governments and discussed plans to invest. This is something we always do. Currently, we have about 4 lakh capacity at the Chennai plant. Right now, we’re preparing to start the third shift,” Ishida said.
In January, Business Line had reported that Renault-Nissan is looking to double its local capacity to 8 alkh units a year by 2016.
With Renault adding local production of volume models such as the Duster, followed by the Scala and Nissan’s Micra and Evalia expected to see strong demand, the alliance is likely to exhaust the 4 lakh production capacity at the Chennai facility in the next two-three years.
Additionally, a high export share and the launch of Nissan’s value-focussed ‘Datsun’ brand in India by 2014 will put pressure on the company to expand output rapidly.