Renault delays Chennai plan

Indications of the global slowdown are trickling into the plans of international automotive players operating in India. French automaker Renault has recently said that it has decided to freeze investments in its new 400,000 units per annum, manufacturing plant in Chennai. This is the same project from which Mahindra & Mahindra pulled out in 2008. The investment was then being made by Renault and its Japanese subsidiary Nissan Motor Company.

Although Renault has said that its investment at Chennai has been put on hold, Patrick Blain, executive vice-president for sales, recently said that the freeze doesn’t mean that the project has been shelved. He clarified that while Renault had a date for the completion of the project earlier, now there is no completion date. Nissan’s investment at Chennai however is going ahead as planned, Blain said. Nissan however is now evaluating a wide range of projects in the pipeline, to reduce capital expenditure and improve its cash flow.

Though Nissan is going ahead with its plan to produce its New Micra from Chennai in 2010, Renault plans to roll out its future new models like the Megane and the Sandero from its Nashik plant, which is part of the JV with Mahindra. However, nothing has been finalised on the new models coming out from Nashik just yet.

Renault and Nissan had planned to set up separate production lines at Chennai and Renault was supposed to launch products made there from 2010.

Recently, Renault and its partner Nissan had decided to scale down production plans at Chennai with a common assembly line. The joint venture in India planned to manufacture 400,000 cars by 2014.

Also, Nissan recently opened its Nissan Technology & Design Square in New Delhi. The idea was developed to give students an inside view into the world of vehicle design and technology.