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Nissan-renault Venture May Go Beyond Logan for India

The Nissan-Renault venture may entertain an intensive expansion and may go beyond the Logan to include light commercial vehicles (LCV). The company also intends to make India the core for developing small cars for the BRIC markets.

The Nissan-Renault Chairman Carlos Ghosn said, "There is no doubt both alliance partners Nissan and Renault are very significant players in the LCV market not only because it is booming in India, but also because both Nissan and Renault have an entire line up of products in that area."

However, Ghosn said that it is still too early to talk about it because the combine's primary objective is passenger cars. "The initial phase will focus on cars so we are not ready to talk about it yet. There's no point piling up plans without execution." However, he added, "That doesn't mean the day we think the time is right for LCV we will not go in for it. Because we will."

In regard the manufacture of small cars, Indian inputs will be involved in development and sourcing. Any small car platform for the Indian market or the BRIC market will "include either Indian engineering inputs or will be developed in India. When we want to bring small and cheap cars into any market, India is great at developing and engineering these products," Ghosn said. Also, if the venture includes an Indian model, it will also involve an Indian partner.

"Frankly, if we want to do for India we will do it with an Indian partner because Indian inputs are very important," Ghosn noted. The partner may be M&M if "we agree with them and them with us and so far we are happy with them but it is still undecided," he said.

Analysts are pointing at Mahindra & Mahindra as potential partners in the new venture. "Cooperation with M&M on LCVs has neither been discarded nor decided," Ghosn said. The French-Japanese auto alliance has a domineering presence in light commercial vehicles with models like the Atlas, Atleon, Cabstar, Caravan, Civilian, Clipper, Interstar, Kubistar, Master, Primastar, Trafic, and the Vanette.

While Nissan and Renault will pursue a complimentary India strategy, the main concentration of the automakers will differ initially. The Japanese automaker will focus on exports while Renault on the Indian market. Then Nissan will get a cracking on India and Renault will pick up speed on exports out of India, Ghosn said. "Nissan will start exporting initially because the needs for exports have already been outlined," he explained. "In the domestic market, Nissan is still prospecting. But ultimately Nissan's share of the 400,000 unit Chennai plant will be dedicated mostly to the Indian market."

As for Renault, it has started delivering vehicles in India but the "market also has potential for export; so Renault will also begin efforts towards exports while Nissan will work the other way round," Ghosn said. Nevertheless, on sourcing, they will follow a combined deal that will allow them to source components, engineering and IT work from India. Nissan will be functioning similarly as foreign automakers as well as the distribution and assembly of the Isuzu cold air intake, Toyota engines and more other important auto components.

"Already, there is a common purchasing organization working on that called the Renault Nissan Purchasing Organization," Ghosn said. "Indian suppliers are very efficient and already Renault has started sourcing from India, thanks to the Logan. Nissan will check with them for sourcing opportunities for both Indian and global products."

Ghosn added, "India is part of specific sourcing objective from LCC markets and India is a strong candidate in that area. Already in the post Value Up Plan, sourcing from low-cost countries will go up and India will be the new sourcing base for that," he said. India will also be considered for both IT outsourcing and engineering.

Nissan currently has a centre in Hanoi where 800 engineers support its technology centre in Japan. "There will be something similar in India because the engineering talent in India is remarkable. The combine may also tap M&M for an extension of the alliance to cover components and engineering outsourcing in future though there's nothing definite on that yet," he said.

About The Author Given her background on cars as an auto insurance director, Lauren Woods finds the world of cars to be constantly changing.
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