India Manufacturing Talk

Renault Nissan Oragadam Plans on track

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• Author: Nikhil
• June 7, 2009
• Category: Automotive, Commercial Vehicle, Industry News

In the wake of the recent news that Mahindra & Mahindra would no longer be part of the Renault Nissan venture at Oragadam, local industry received reassuring news when Nissan confirmed that plans for the Oragadam plant were on track.  The plant which is spread over 640 acres is scheduled to be completed in May 2010.   However in view of the global recession Renault’s plans for a manufacturing line at the facility has been suspended for the moment.

Citing a drop in global demand for cars from 68 million cars in 2007 to 54 million in 2008, Colin Dodge, Executive Vice-President, Nissan Motor Company, Renault’s decision to ‘suspend’ its plan for a production line at the upcoming facility should be read in this context.  “Renault is very much there in the venture. They will come back to have their production line,” he said.  The Oragadam venture would have flexibility to make products on three platforms — A segment cars, B segment products and light commercial vehicles.

India, according to Kiminobu Tokuyama, President and CEO of Nissan Motor India, will see largest capital investment from the auto major in 2009. The company had drawn up a 350 billion yen global investment plan. Nissan would launch nine models in India by 2012, including five India-made models. At the moment, it had only two models. In the current year, it would launch 370Z, X-Trail and Teana in India.

The Oragadam project promoters had committed an investment of Rs. 4,500 crore over a seven-year period from the MoU (memorandum of understanding) date of February 2008. Initially, the unit would churn out two lakh units, which could go up to four lakh units at full capacity. Over 20 suppliers were also expected to house their units in the suppliers’ park that was coming up adjacent to the car project, they said.

Source: The Hindu – Work Apace at Nissan’s Oragadam Project

Meanwhile, Mahindra & Mahindra has reviewed its plans, while Renault and Nissan continue to be fully committed to their industrial development plans:

• M&M will utilise capacity available at their Chakan plant and other existing plants to meet its medium term requirements and hence shall not participate in the joint plant at Oragadam.
• Mahindra shall continue its Mahindra Research Valley (MRV) at Chengelpet and MRV test track and tractor plant plans in Oragadam.
• It shall simultaneously evaluate a new automotive plant at Oragadam to further enhance its capacity. The Chakan plant owned by Mahindra will manufacture Mahindra as well as Mahindra international truck products.
• Renault and Nissan maintain their development plans for the creation of a new industrial plant in Chennai. They maintain their long term commitment to India, with local development including design, engineering, component outsourcing, manufacturing, etc.

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