Nissan plans for big investment in India

Nissan plans for big investment in India

The Nikkei newspaper reported on Monday that Nissan, the second largest automaker in Japan plans to build a 200,000 units-per-year capacity plant in India, with a resulting investment for $420-500 million. The construction on the main assembly plant will begin this year and is expected to launch operations in the latter half of 2009 with an annual capacity of around 200,000 units-a-year.

For this Nissan has short listed two-three coastal cities in the western and southern India as potential locations for the plant and plans to negotiate with local governments before making a decision which is expected to come by month end. Also about 10 parts suppliers in Japan will start local operations bringing the groups total investment to around 100 billion yen. Also among its groups, Calsonic Kansei Corp is expected to invest around 5 billion yen for a factory to produce air-conditioning units and other parts, the Nikkei said.

The production will mostly centre on a new compact car with a heart of around 1000cc of which one-third will be sold in India and the rest will be exported to Europe and other regions. This put Nissan in competition with cars like the re-launched Zen Estilo, Wagon R, and Alto from Maruti Suzuki and Santro from Hyundai motors. Nissan would gradually add more models and expand the annual capacity to 400,000 units. This might include the introduction of new cars after gaining a grip in the entry level segment and might include cars like the new 2008 Rogue to go up against the Honda CR-V.

Renault holds 44% of Nissan and they are still considering if to participate in a joint project between France's Renault and utility and tractor maker Mahindra & Mahindra, which are due to build a plant to assemble 500,000 cars a year from mid-2009. A decision in this matter is expected at the beginning of March. However, Nissan has an agreement as per which Suzuki is to supply Nissan with a new small car on am original equipment manufacturing basis, mostly for export to Europe starting in 2008.

The new manufacturing plant in India will be beneficial for the Indians which will open the possibilities of bringing out cheaper cars to the ever growing Indian car market. Who knows, maybe we will even get to see cars like Altima Coupe or 350Z ...eventually.It is the second largest project next to the Renault and Mahindra & Mahindra collaboration of building a 500,000 unit plant. Certainly a little competition never hurts anyone.