Nissan, Renault working on JV equity break-up

Japanese automobile giant Nissan Motor is in the process of formulating a break-up in the equity holding and production capacity to be shared between the company and Renault in its proposed manufacturing plant in Chennai.

"While Mahindra & Mahindra (M&M) will have an equity holding of 50 per cent in the plant, Nissan and Renault will jointly hold the remaining. However, the break-up of the equity holding and production capacity between Nissan and Renault have not yet been finalised. We are working on this. Besides, we are working out modalities on setting up a special purpose vehicle for execution of the Chennai manufacturing plant, which will be announced later this year," Neeraj Garg, director (marketing and sales), Nissan Motor India (NMIPL), told Business Standard.

The three companies have committed to invest around Rs 4,000 crore in the plant, which will have an installed capacity of 4 lakh vehicles over the next seven years.

Garg said the Tamil Nadu government had identified 1,000 acres in Chennai for the plant; and was expected to allot it this year.

"The plant will have an assembly line each for the three companies, and the first vehicle from these assembly lines, which ever completes first, would be rolled out in 2009," he said, indicating that Nissan would be concentrating on the compact car segment in the country.

NMIPL, a wholly owned subsidiary of Nissan, is importing its models - sports utility vehicle X-Trail and the recently launched high-end luxury sedan Teana - to India.

The company sold around 550 X-Trails in the country till March 31, 2007. It plans to sell around 250 X-Trails and 350 Teanas in the 2007 calendar year.

"We are not concerned about sales volumes and are more focused on building the Nissan brand with new launches and see which range of our cars actually meet the requirements of people, ahead of starting our manufacturing in the country," Garg said.