Nissan’s manufacturing facility at Oragadam will go on stream in May next year, despite JV partner Renault temporarily suspending investments. Jayashankar Menon reports.

Company officials have expressed optimism that the new plant will become a global hub. According to Nissan, its joint venture partner Renault has temporarily suspended operations until its global cash position improves. Colin Dodge, executive vice-president, Nissan Motor Company, said that Renault is still part of Renault Nissan Automotive India, which is promoting the Oragadam project.

Meanwhile, Nissan Motor India will export cars to Europe from Oragadam in the second half of 2010. The Renault-Nissan 50:50 joint venture had originally planned to invest Rs 4,500 crore in the new facility that could produce 400,000 cars per annum.

Dodge said that the production of a B-segment hatchback model (expected to be the New Micra) will start in May 2010 and there are plans to export over 100,000 units in 2011, eventually growing to 180,000 units in the future.

The company is targetting 5.7 percent market share by 2012. Dodge said, “India’s car market will continue to grow. While the US has 800 cars per 1,000 persons, in India the number is less than 20 cars per 1,000 persons. The Russian market started booming only five years back and has touched 250 cars per 1,000 persons.”

He added, “Globally we will be investing $3.6 billion this year and India will be our single largest investment in this period.” Kiminobu Tokuyama, president and CEO of Nissan Motor India, said the company plans to launch nine models by 2012 in India. While the original plan was to set up two manufacturing lines, Renault’s change of plans means that now only one line would be set up with a capacity of 200,000 cars a year.

Commenting on this change in plans, Marc Nasif, country general manager for Renault India, said: “Though we have suspended our production plans for the time being, we would continue to invest in building infrastructure for the plant. We cannot give you a definite time frame for the resumption of work”. Meanwhile, Nissan has appointed Hover Automotive India to look after marketing and sales of Nissan cars in India and according to GM Singh, vice-chairman, the company has sold 250 vehicles in 2008-09.

LCV production

In a related development, Nissan Motors also announced that it would commence manufacturing light commercial vehicles (LCVs) along with its joint venture partner Ashok Leyland from mid-2011, both for the domestic and export markets.

Dodge said, “Initially, we are planning to manufacture light trucks from both our plants, when construction work is completed. We will be taking a call as to how we could take this project further, at our future board meeting.” Last month, Ashok Leyland announced that the initial investment of Rs 2,000 crore would be scaled down. Besides the original plan of the JV to produce three-, four- and six-tonne vehicles, Nissan also plans to manufacture some additional products for its export markets in this new venture.

Global perspective

Nissan has 26 plants in 17 countries and 22 R&D facilities spread across 12 countries. It currently employs around 180,000 persons. On June 2, it inaugurated its new assembly plant in St. Petersburg, Russia. Nissan is also moving forward with electric vehicle production and will unveil its EV model in early August this year.

This year will see the launch of the Patrol SUV model in the Middle East and NT400 Cabstar in China. It also plans to launch a flex fuel-based product line-up in Brazil.

Providing the outline of Renault Nissan Technology & Business Centre Pvt Ltd, Grahame Cornforth, senior vice-president and director, said: "In 2007, we set up this centre in Chennai under the Renault- Nissan alliance. This is a 50:50 JV, open to all global technical and business operations of Renault and Nissan.”

He added that the purpose of setting up the centre in the Indian Institute of Technology (IIT), Chennai is to tap into a large and capable engineering talent pool and further establish alliances with renowned local universities and research institutes.

The centre caters to the global engineering needs of Nissan and Renault in various technologies including advanced CAE, product development, digital vehicle development and fundamental research, as well as in-house software development centre and global purchases.