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New Delhi, Nov 9: Japan's second largest automobile manufacturer Nissan Motor Company on Thursday scrapped plans of setting up a car plant in India with Suzuki Motor Corporation. Instead, Nissan is negotiating with French major Renault and Mahindra & Mahindra for the plant.
“Nissan is in active discussion with Renault and Mahindra & Mahindra for a new partnership and will decide on this in four months. Hence, we will not continue our discussion with Suzuki for the new project,” Nissan stated.
However, Nissan would continue to work with Suzuki for original equipment supply from India for a new small car for Europe, the company said.
In June this year, Suzuki, which has 54.2% stake in Maruti Udyog Ltd, announced it would manufacture cars for Nissan at its facility at Manesar in Haryana. The announcement was aimed at strengthening the alliance to help each other expand in markets like India and Europe. Under the agreement, Suzuki was to develop a compact car for Nissan for the local and export markets, particularly for Europe.
Commenting on Nissan's decision to dump Suzuki, a Maruti spokesperson said the company had nothing to do with the decision as the agreement was between the two Japanese auto majors. Maruti said its contract with Nissan for supplying 50,000 compact cars to the European market remained intact, and that shipments would start in 2008.
Nevertheless, Maruti's scrip took a beating on the Bombay Stock Exchange after news of the Suzuki-Nissan parting broke out, to close at Rs 911.45, down 2.75%. In contrast, M&M shares closed 6.15% up at Rs 828.
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