Nissan-Renault seeks third partner for Chennai project

New Delhi: The Nissan-Renault alliance wants to induct 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. Nissan-Renault officials invited the Hinduja group company to move its light commercial vehicle (LCV) joint venture project with Nissan to Chennai to better use the plant’s 400,000 unit-a-year capacity. But Ashok Leyland turned down the offer.

Nissan has a $500-million joint venture with Ashok Leyland for light commercial vehicles which signed a memorandum of understanding with the local government for a 380-acre new factory in Pillaipakkam, also near Chennai, with 100,000-unit-a-year capacity. It is this project that Nissan-Renault want Ashok Leyland to shift to its Chennai plant.

Ashok Leyland MD R Seshasayee said “I have no knowledge of this.” A Renault spokesman in India also denied the move, saying: “The JV with Ashok Leyland is independent of Chennai because Nissan and Renault have competing light commercial vehicle products.”

A Nissan India spokesperson too said that she was not aware of any third partner being inducted into the Chennai project. “Nissan is going ahead with its small car plans, while Renault has put its plans on hold due to financial problems. I have no confirmation of anything beyond this,” she said.

The Chennai factory project, for which the Renault-Nissan combine is seeking a third partner, is a 50:50 venture between Nissan and Renault.

While Renault is going slow on plans to manufacture its new cars at the Chennai factory, Nissan’s India strategy is still on track. At the Chennai plant, Nissan will produce a family of models based on its new A-platform, including the next generation small car, Micra.

Nissan plans to introduce nine products in India, ranging from the ULC car, a compact car and LCV to higher-end SUVs and sedans, including five locally-built products by 2012.

Three LCV companies have been created with Ashok Leyland. Renault, for its part, has a 49:51 JV with M&M for M&M-Renault’s Logan in Nashik, and its distribution through the M&M network.