Utility vehicle maker Mahindra & Mahindra may not harbour ambitions of manufacturing small cars on its own, but it sure seems keen to market such vehicles.
Sources said negotiations are at an advanced stage
NEW DELHI: Utility vehicle maker Mahindra & Mahindra (M&M) may not harbour ambitions of manufacturing small cars on its own, but it sure seems keen to market such vehicles. Going by sources, M&M is in advanced stages of negotiations for forging a marketing tie-up with Nissan Motor Company for the latter's small cars.
Nissan has already made it clear that it plans to bring some of its existing small cars to India, but has not indicated how such products would be sold across the country. It has a marketing arm in the country that sells the 'X-Trail' and 'Teana', but sources say the company may not have adequate infrastructure and reach to cope with the demands of small car distribution.
M&M may be keen to establish a marketing joint venture with Nissan, similar to the JV it is already operating with Nissan's sister company, Renault, for selling the Logan across India. M&M holds the majority stake in Mahindra Renault India.
Already, M&M and Nissan (along with Renault) are equity partners in a manufacturing project at Chennai. Nissan would eventually make its small cars here and may decide to sell these through the widespread M&M dealer network - Logan is already being sold across the existing M&M dealer network. In the Chennai project, M&M holds 50% equity and the remaining 50% rests with the Nissan-Renault combine.
Asked about M&M's small car plans, president of the company's automotive business, Pawan Goenka told DNA Money, "We have no plans on small cars; our focus would remain SUVs and derivatives. We plan to make SUVs even in the Chennai plant once it is operational."
But what are the other two partners going to manufacture at Chennai? Goenka said that while Renault would be making vehicles based on the Logan platform, he was unaware of Nissan's plans for Chennai. On whether M&M was holding any discussion with Nissan which was outside the three-way manufacturing partnership, Goenka said, "I cannot disclose any other discussions with either Nissan or Renault."
But, Goenka did admit that the Chennai plant, which was earlier expected to begin production by early 2009, may face some delays due to land acquisition. "Land should come to us this month and it will take about 24 months thereafter to begin production," he said.
The plant would have an installed capacity of four lakh vehicles per year.
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