Ghosn meets Ashok Leyland brass; will talk to Bajaj today

Carlos Ghosn’s multi-partner approach in India isn’t exactly working to the desired effect. That perhaps explains the intense parleys lined up between him and two of the three big alliance partners here.

On Sunday afternoon, Ghosn held a closed door, one-to-one meeting with Ashok Leyland MD R Seshasayee on the contours of Nissan-ALL light commercial vehicle (LCV) alliance. This partnership has seen a significant scale-down recently because of paucity of investments by both partners. It is believed that the LCVs would now be made at ALL’s existing facilities instead of setting up a greenfield unit for the purpose.

Next, Ghosn meets Bajaj Auto MD Rajiv Bajaj on Monday evening. Ghosn’s pet project, the development of an ultra low cost (ULC) car, has been facing hiccups because of differences between Renault and Bajaj over technology and design of the vehicle. Differences have also cropped up over the price point at which this car should sell; Bajaj’s contention of developing a “super” fuel efficient vehicle under low cost parameters is another stumbling block.

Ghosn himself is quite sure of the workability of the ULC project and said during media interaction earlier on Sunday that he remains committed to bring the low cost car to India, reiterating his belief in India’s prowess as a centre for frugal engineering. On the pricing of this vehicle, Ghosn said he wasn’t stuck on the $2,500 point. This project was initially slated for 2011 launch, but that deadline could well be missed, since even a vehicle prototype has not been agreed upon so far.

Surprisingly, as of now, no meetings are scheduled between Ghosn and officials of Mahindra & Mahindra (M&M). The two companies have been struggling with their JV, Mahindra Renault (MRPL), due to dismal sales of the Logan sedan. Speculation has been rife about the JV breaking up because of unviability. So shouldn’t Ghosn be meeting Anand Mahindra during this visit? It seems discussions on a possible product realignment are on between the top managements of both companies but Ghosn is obviously not part of these, at least for now.

Ghosn admitted that sales of the Logan were a cause for concern; production of the sedan last year was less than a third of capacity and the joint venture lost Rs 490 crore in 2008-09.

On the difficulties his companies were facing with Indian parners, Ghosn said, “I never thought that coming to India will be right at the first time. Nobody gets it right in the first time in any country and particularly in a country with long tradition and long history like India. So, we would be naive to think that everything you are going to undertake, you are going to be successful in the first time. But we have the patience, we have the determination and we have the focus, and hopefully the modesty to recognise when things are going well and when things are not going well and to learn from them.”