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Nissan’s Made-in-India car next year

Friday, 28 August 2009 - 3:31am IST | Place: New Delhi | Agency: dna

Nissan will launch Micra by June 2010 from its Chennai facility. All supplies of the hatchback to Europe will be done only from India.

Nissan Motor Co is betting big on India. Though this Carlos Ghosn led company has only a token presence in the country at present with just two imported products, it is planning to launch the first Made-in-India car next year. And, in keeping with Ghosn’s ‘frugal engineering’ cry, Nissan has already decided to use India as one of its major global manufacturing hubs.

The company is in the final stages of developing a global strategic small-car platform from which the first product to roll out would be the India-made Micra (or March) hatchback in June next year. The car would be built at Nissan and sister company Renault’s joint production facility coming up at Chennai.

Kiminobu Tokuyama, the MD & CEO of Nissan Motor India, told DNA Money, “We have decided to shut the UK manufacturing plant for Micra and shift production of this car to India. From June next year, all Micra supplies to Europe would be done from Chennai.”

He said the investment in this 400,000-unit facility stays at Rs 4,500 crore over a 7 year horizon and the product pipeline from Nissan would see nine different cars being launched in the medium term. The small car platform itself would be used to develop and launch the Micra hatchback, an unnamed sedan and another model. Then, the existing CBU lineup of ‘Teana’ and ‘X-Trail’ would be augmented with the ‘370 ZX’ global sports model early next year, followed by another CBU model.

Tokuyama made it clear that India is being seen as one of Nissan’s prominent export hubs since Micra production for Europe would be shifted to Chennai. The overall export target within the first 12 months has been fixed at an ambitious 110,000 units! This would be increased to 180,000 units by about 2014.

And what is Nissan’s domestic market target for 2011, by when other global brand names such as Toyota and Volkswagen would also have made an entry into the small car segment? “Nissan held a global market share of 5.7% in 2008 and I see no reason why we cannot target this minimum number in India,” he said.

Nissan at present has two distinct companies in India - NMIPL which is the marketing, distribution and sales arm, and RNAIPL, which is the manufacturing facility.

Besides, it is involved as the third partner in the Renault-Bajaj ultra low cost car project
and also has another joint venture with Ashok Leyland for light commercial vehicles.

To a question on why were the crucial functions of sales, marketing and distribution farmed out to an external agency (Hover), Tokuyama said Hover is run by people who know and understand the Indian market well. Through Hover, NMIPL plans to set up 55 dealerships by 2012 and thereby cover 80 per cent of the Indian market.

Nissan’s Indian operations have recently been restructured with the manufacturing and marketing/sales functions being put under two different companies. While Tokuyama heads the latter, RNAIPL is being headed by Akira Sakurai.

Tokuyama said that though sister company and JV partner Renault has frozen its product plans for India for the time being, it has decided to launch made-in-India products by using Nissan’s small car platform. He said that though the manufacturing JV is a 50:50 partnership, the Rs 4,500 crore investment may not be split in the same ratio.

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