Global allies Nissan Motor Company and Renault have decided to delay vehicle production projects in India in view of the slowing economy and falling sales of cars and CVs. The auto maker is reviewing projects with an intention to reduce capital expenditure and improve its cash flow.
Nissan and Renault have a range of projects lined up in India. These include building passenger cars and commercial vehicles. Nissan will, however, go ahead with its planned joint venture Chennai car factory in India with France’s Renault scheduled to begin in the first half of 2010 albeit with a single shift unlike the initially planned two.
The factory is slated to have annual production capacity of 400,000 cars by 2015. The company has made an investment of Rs 4,500-crore in this project.
The project has already seen a setback when Mahindra & Mahindra, which was originally the largest stakeholder with 50 per cent, pulled out of it. Nissan and Renault then formed a joint venture to continue the project.
Also, Nissan’s truck project with Ashok Leyland has been delayed and is now slated to take off by mid-2011.