Nissan Motor, Renault, M&M nearing pact

Tokyo, Jan 22 | Updated: Jan 23 2007, 05:30am hrs
Nissan Motor, Renault SA and Mahindra & Mahindra Ltd. are close to announcing a joint project that would pave the way for Japans Nissan to enter the booming Indian market in earnest.

Nissan had said in November it would decide within four months whether to join a partnership between Mahindra and Frances Renault thereafter a planned manufacturing project with Japans Suzuki Motor Corp fell through. Nissan chief operating officer Toshiyuki Shiga said on Monday the three-way talks were proceeding faster than expected, and indicated that a plan was being drawn up since any announcement would likely be made jointly by the three companies.

Nissan currently sells only the imported X-Trail sport utility vehicle in Asias fourth-biggest economy, with sales there totalling 190 units last year. With Indias total passenger car sales forecast to double to 2 million units by 2010, global auto makers are all scrambling to increase their slice of the market. Shiga also said Nissan had no immediate plans to set up its own car factory in India. The Nikkei business daily reported earlier this month that in addition to the possible project with Renault and Mahindra, Nissan would build its own 200,000 unit-a-year car plant with an initial investment of $420-500 million.

(An independent plant) is not under consideration right now, Shiga told reporters on the sidelines of an event to launch the new Pino minicar in Japan.

Renault, which holds 44% of Nissan, and Mahindra, are due to build a plant to assemble 500,000 cars a year from mid-2009. Shiga declined to go into details about Nissans plans, including the type of car it would bring to India where cheap, small cars with specifications unique to the country make up roughly 70% of the market.

Nissan has a separate, ongoing agreement with Suzuki under which the mini-vehicle maker will build a new small car in India under Nissans badge, mostly for export to Europe starting in 2008. Suzuki dominates the Indian market through its majority ownership of national auto maker Maruti Udyog Ltd.