The Nissan-Renault alliance wants to introduce a third partner into its $1.1-billion (Rs 4,500 crore) Chennai factory project, which is scheduled to manufacture cars and SUVs by 2010.

 

Earlier, it was a three-way joint venture (JV), but Mahindra & Mahindra (M&M) pulled out early last year, citing the lack of synergy. Nissan-Renault officials invited the Hinduja group company to move its light commercial vehicle joint venture with Nissan, all the way to Chennai; in order to use the plant’s 400,000 unit-a-year capacity. This was also done in the wake of pressure to cut back big ticket investments globally. This offer was turned down by Ashok Leyland.

 

Nissan currently has a $500-million joint venture with Ashok Leyland for light commercial vehicles. They have signed a memorandum of understanding with the local administration for a 380-acre new factory in Pillaipakkam, near Chennai, with a capacity of 100,000-unit-a-year.

 

Ashok Leyland MD R Seshasayee declined having any knowledge of this. The JV with Ashok Leyland is independent of Chennai because Nissan and Renault have rival light commercial vehicle products.

 

The Chennai factory project, for which the Renault-Nissan combine is seeking a third partner, is actually a 50:50 venture between Nissan and Renault. Renault is going slow on plans to manufacture its new cars at the Chennai factory and Nissan’s India strategy is still on track. Nissan will manufacture a family of models based on its new A-platform, including the next generation small car, Micra at the Chennai plant.

 

Nissan plans to introduce nine products in India, ranging from the ULC car, a compact car and LCV to higher-end SUVs and sedans.