Nissan won’t use M&M tag

NEW DELHI: Nissan-Renault chief Carlos Ghosn may have roped in Mahindra & Mahindra for marketing and distribution of the Logan in the country, but when it comes to the Nissan badge of small cars, it seems he has other plans.

In fact, there have been several flip-flops over Nissan’s small car plans for India. First, Nissan walked away from advanced negotiations with Suzuki Motor Company for a manufacturing alliance meant for the Indian market last year. Then, it decided to make cars as part of a three-way joint venture with group company Renault and M&M.

It now transpires that Nissan has decided against using the M&M distribution and marketing network and instead plans to set up its own network in the domestic market. Neeraj Garg, director, marketing and sales, Nissan Motor India told DNA Money: “Nissan will establish its own marketing and distribution network for the compact cars that will roll out of the Chennai facility. We will do this through a separate organisation, not through M&M’s existing network”.

Asked whether Nissan did not find M&M competent enough to handle the marketing and distribution of its cars, Garg said "M&M's competence is not an issue. We simply did not examine the possibility of using M&M's network for marketing our product". In this JV, M&M holds 50% stake, whereas the remaining 50% is divided between Renault and Nissan. One would have thought that since Renault is partnering M&M for manufacturing as well as marketing and distribution of the Logan, Nissan would have also adopted this route.

Interestingly, Nissan will still be using the Maruti Suzuki facility at Manesar for making 50,000 units per year of Nissan badge of cars, which will be exported to Europe. Does this mean the Chennai facility will service only the domestic demand? It will have an installed capacity of four lakh cars per year, distributed between the three JV partners.

Then, what kind of investments would Nissan bring to the Indian small car venture? The three-way JV with Renault and M&M will see a combined investment of Rs 2,000 crore from Renault and Nissan together, but Garg says how much of this would come from Nissan independently is still being worked out. Also, there is no decision yet on whether Nissan would make an ultra-cheap car or a high-end compact at the Chennai facility. At present, Nissan sells the X-Trail which is being imported as a CBU from Japan. It has dealerships in Mumbai, Delhi, Chennai, Hyderabad and Bangalore.