Following the exit of Mahindra & Mahindra from the three-way joint venture, Nissan and Renault have decided to go ahead with the Chennai automobile project with a 50:50 equity partnership. Both the companies have entered into a Memorandum of Understanding (MoU) with the Tamil Nadu government on Friday and have announced to invest a minimum of Rs 4,500 crore, which is significantly higher than that of the announcement made last year.
Addressing a press conference here, Carlos Tavares, executive vice-president, Nissan Motor, said: ?We have decided to go ahead with the Chennai project. The project will have an initial capacity of 4,00,000 units per annum and both the companies will have 2,00,000 capacity each to make their own products.?
?We expect the project to commence production in 2010 and the work will start soon,? he said. In addition to passenger cars, the joint venture will also manufacture power trains, gear box among other things. ?The project will have a localisation of 90% from the beginning and have already identified 40-odd vendors for outsourcing the parts,? he added.
Though the project is managed by Nissan Motor, both the companies have their own strategy to make different cars and other vechiles. Both will have different marketing and distribution network both the companies will launch cars simultaneously. ?We need to work out lot of technical details and will be announced soon,? he added.
Carlos Dodge, senior vice-president, Global Business, Nissan, said: ?We plan to launch compact cars initially, followed by premium and larger cars.
According to Ashish Shinaroy, VP, Renault India, ?We will have a range of products to introduce in India across all segments. Both the companies have a joint purchase company in India and have identified 40 vendors to source parts. We will be investing over 200 million euro to source parts initially from these vendors.? For Renault, Mahindra and Mahindra will be the distribution partner as the latter is already a joint venture partner for Logan cars in India, he added.