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The Renault-Nissan car plant near Chennai is set to nearly double its output for the third year with a production of 250,000 cars this year.
The unit set up by Renault Nissan Automotive India Pvt Ltd commissioned its second production line in March to achieve the fully committed capacity of over 400,000 cars a year. With this, the Rs 4,500-crore investment by the Renault Nissan Automotive India Pvt Ltd, beats the deadline for full capacity by three years, according to Mr Koji Takei, Senior Vice-President of the company.
It has also completed over 80 per cent of its investment at the car plant located at Oragadam, an industrial suburb about 45 km west of Chennai.
Next week, it will launch the ‘Evalia', a passenger car that is set to ferry New Yorkers around as it will be inducted into the city's taxi fleet next year. The other launch will be the Duster, a SUV-like vehicle, he said.
In 2010, the company manufactured 75,000 cars, and in the next year 1.35 lakh units.
With the full installed capacity, for 2013 there are “major expectations of growth on a global basis,” but the plans are yet to be finalised.
Room for expansion
There is still head room to expand its marketing to match the capacity, pointed out Mr Takei. Of the 1.35 lakh units, the company exports nearly 70 per cent of its production with about 39,000 units being sold in the domestic market.
This is primarily because it is still expanding its sales outlets.
The 640-acre facility has adequate land area to accommodate a major expansion in line with demand, he said.
Renault-Nissan is inviting its component suppliers to set up shop closer to Chennai to increase speed of delivery.
Nearly a 100 companies supply parts for the cars and half of them are close to Chennai.
The others are in Delhi, Bangalore and Pune which poses a logistics challenge. It takes nearly a week to transport the parts from Delhi, he said.
Mr Takei was addressing a meeting organised by the Japanese External Trade Organisation, an agency that promotes overseas investments by Japanese companies.
The Oragadam plant, which employs over 5,000 workers, has achieved global best standards in quality thanks to the local skilled manpower. There are eight expatriates in the top level management and 10 from here.
The company's policy is to make the top management completely in the hands of local skills in 5-10 years, he said, highlighting the advantage of setting up the unit in Chennai, which has earned a reputation as a hub of automobile production with global manufacturers such as Hyundai, Ford and BMW.
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