TOKYO: Japanese automaker Nissan Motor Co. is setting up a car manufacturing plant in India with 200,000 units-a-year capacity. The company plans to invest around 60 billion yen initially, according to media reports in Tokyo.
The plant is expected to begin operations in 2009. It is expected to make compact cars of 1000 cc engine and about 30 per cent of the total production will be sold in India and the rest exported, according to the reports.
France's Renault SA and India's Mahindra & Mahindra Ltd have already set up a joint venture to assemble some 500,000 cars annually from mid-2009 and Nissan had been considering whether to participate in this project. Renault is a major shareholder in Nissan.
Nissan are of the view that India's growth calls for a plant of its own, as there will be tremendous export potential in view of the cheap production costs in the country. Irrespective of this decision, Nissan is expected to take a stake in the joint venture.
The location of the plant is yet to be decided.
Nissan plans to add more models and increase the annual capacity to 400,000 units.
The automaker will also persuade several of its parts suppliers in Japan to set up operations in India. Among these suppliers is Calsonic Kansei Corp., which makes air-conditioning units and it is planning to invest nearly five billion in a factory in India.
Nissan has an agreement with Suzuki Motor Corporation to provide it with small cars under OEM basis for export purposes. The supply is to begin in 2008. Nissan also planned to set up a joint venture with Suzuki, but discussions were called off as the company decided to set up its own plant.
