Nissan chooses Mitsubishi over Maruti

Will sell small cars made jointly with Mitusbishi in markets earlier catered by the Maruti Suzuki-built hatchback Nissan Pixo

Japanese car maker Nissan has decided against sourcing any further cars from Maruti Suzuki and will instead jointly build them with help from partner Mitsubishi.

Nissan will market these small cars across the world including in those areas which was earlier catered by the Maruti Suzuki-built hatchback Nissan Pixo, which was a rebadged Maruti Suzuki A Star.

As per an agreement signed between Nissan and Suzuki Motor Corporation (SMC) Maruti Suzuki fully built and exported the Nissan Pixo to Europe. The Pixos came at a premium compared to the Maruti A Star in those markets.

After German-giant Volkswagen bought stake in SMC Nissan decided against continuing with the sourcing pact with Suzuki. A senior executive from Nissan confirmed that there are no plans to revive the sourcing pact with Suzuki from India.

Andy Palmer, Chief Planning Officer, Nissan Motor Corporation said, "We have some supply relationships with Suzuki in Japan but generally speaking our small car will be basically coming from Mitsubishi."

Nissan, which has struggled in India with a share of just 1.5 per cent, has not only altered its strategy for India (with the launch of the economic brand Datsun) but has changed plans for world market too. Through the coming on-board of Mitsubishi the Renault Nissan Alliance has got a shot in the arm.

Several new projects covering shared products, technologies and manufacturing capacity among the automakers will be explored. The emphasis is put on development of small cars, also known as 'Kei' cars in Japan.

Nissan tried to rope in truck manufacturer Ashok Leyland in the global small car venture but the Hinduja-promoted firm did not show much interest citing lack of experience in the passenger vehicle segment.

Maruti Suzuki, India's largest car maker stopped producing the five-seater A Star a few months ago less than six years after it was launched. Poor market response forced the company to withdraw the model along with another Zen Estilo.

In a supply agreement signed in 2006-07, Suzuki agreed to supply a one-time order of 30,000 units of the Pixo to Nissan. Fuelled by scrappage incentive schemes introduced by several European countries back then demand for Pixo Nissan had increased the order to 50,000 units.

After a gradual withdrawal of the scrappage incentive scheme, subdued market conditions and a vehicle recall by Suzuki to rectify a technical problem, Nissan orders for the Pixo dropped to 10,000 units in 2012.