MUMBAI – Japan’sMotor Co. Ltd. will join & Mahindra Ltd. and SA in a Rs40 billion ($905 million) multi-vehicle plant located south of Chennai.
“The project, a unique industrial complex, will provide vehicle production for each car maker, plus a powertrain facility forand ,” the auto makers say in a joint statement.
The Indian government will provide 1,100 acres (375 ha) for the new facility, which will employ 5,000 workers when production begins in 2009. The JV is expected to contribute Rs180 billion ($4 billion) in revenue to the area and create 40,000 jobs. Published reports say the plant eventually will have capacity for 400,000 units annually.
Pawan Goenka, president of M&M’s automotive division, has been named CEO of the as-yet-unnamed JV.
Each partner brings their own strengths to the deal, with Nissan contributing manufacturing technologies and export opportunities; Renault bringing engineering and process expertise; andproviding a supplier base, knowledge of market intricacies and cost-control systems.
Each auto maker will use the plant to produce its own models. Nissan will market its products independently, while Renault will utilize its JV with M&M to sell its vehicles.
“India is a key market for Renault’s international ambitions,” Patrick Pelata, Renault’s executive vice president, says.
Adds Carlos Tavares, Nissan’s executive vice president, “We want to enter rapidly the manufacturing map of India. The race has just begun.”
Nissan earlier opted out of aMotor Corp.- Udyog Ltd. joint venture, seeking more capacity for its compact global car.