Nissan has reportedly set itself an ambitious target of achieving close to 10% share of the Indian passenger car market by 2010.
NEW DELHI: Japanese car major Nissan may have parted ways with Suzuki after it expanded the scope of its ambitious plans for India.
According to sources, Nissan has set itself an ambitious target of achieving close to 10% share of the Indian passenger car market by 2010, or within a short span of four years.
“The issue was production capacity,” Toshiyuki Shiga, chief operating officer at Nissan, told Bloomberg on Monday. “We wanted the equivalent of a new factory.”
What the company therefore needed from Suzuki was a viable cost-sharing agreement for the proposed manufacturing facility as well as an assurance of being supplied a certain number of vehicles per year.
Industry sources said the alliance fell through when Nissan found that both these requirements may not be met. During his recent visit to India, Suzuki Motors chairman Osamu Suzuki had indicated that the new facility (which will need $700-800 million investment) may not have any investment from his company at all.
Another factor that has led Nissan to alter its India gameplan is the strategy of competitors. Companies such as Toyota - which is a major competitor for Nissan in the home market - are also looking at grabbing a similar share of the car market by 2010 and have already decided to pump in mega investments here in putting up a large-scale manufacturing unit in India by 2009.
So what’s Nissan up to now?
Sources said it is readying a comprehensive India blueprint involving a tie-up with Mahindra Renault for sourcing cars and a manufacturing plant on its own. “To grab 10% of the two million passenger car market by 2010, Nissan needs to have manufacturing capability of at least two lakh units. Whether the Mahindra JV will be able to supply this is a big question. So Nissan may ultimately go for its own plant,” said an industry veteran.
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