Renault plans powertrain unit

PARIS: French car major Renault  proposes to set up a wholly owned arm to manufacture powertrains in India.

A powertrain comprises engine and transmission.

The move is part of the French major’s plan to make serious inroads into the local market to give itself incremental volumes.

The French company sold 2.5 million vehicles in 2005, and is hoping to sell 3.3 million units a year by 2009.

Of this incremental 800,000 units, 50,000 is proposed to come from India.

“If you cannot produce in India you cannot compete in India. For us to achieve the goal (800,000 additional units by 2009), we have to be successful in India,” Renault chief executive Carlos Ghosn said. Ghosn said Renault would also scale up its engineering design centre in India. Currently the division has three designers, all expats, and is expected to be ramped up.

Renault and Nissan have cross-holdings in one another and Ghosn is the president of the joint board of both the companies.

M&M has an existing 51:49 venture with Renault to make 50,000 Logan passenger cars in India. This will continue as it is.

Under the new MoU, both partners would hold equal stake. In effect, there will be two joint ventures.

“We will benchmark against the recently completed Nissan’s plant in China, which cost us 35% less than what a similar-sized plant would have cost us in the US. Our objective would be to be set up the plant at an even lower cost,” Ghosn said.

He said the cost would be “much less” than 1 billion euros ($1.28 billion) and that he expects to “do much better” than with Nissan’s factory in Guangzhou, China.