Renault SA has decided to “freeze” investments and product plans for the manufacturing facility that was to come up at Chennai in partnership with sister company Nissan Motor.
The global economic slowdown has claimed another victim. French carmaker Renault SA has decided to “freeze” investments and product plans for the manufacturing facility that was to come up at Chennai in partnership with sister company Nissan Motor.
Even Nissan has admitted it will “go slow” on its part of the venture and there are enough indications pointing to a slowdown in the famous “ultra low-cost” car project these two companies are undertaking with Bajaj Auto.
Patrick Blain, executive vice president for sales at Renault, told a press conference in Paris on Friday that the freeze doesn’t mean that the project has been shelved. “We had a date for completion of the project but we no longer have a date,” he said.
The Chennai manufacturing facility was envisaged as a Rs 4,500-crore project in 50:50 partnership between Renault and Nissan and was scheduled to go on stream next year. A Renault India spokesperson admitted that the ULC project was “on a slow crawl but has not been frozen” while asserting that the Chennai investments have been frozen only temporarily.
Meanwhile, Nissan said it will go slow on its car manufacturing plans in India. “We will initially start with a single production line instead of the two decided earlier,” Shohei Kimura, managing director, Nissan Motor India, told agencies. He said the decision was made due to the economic conditions and slowdown in demand. “As such, we have decided to go slow on our plans temporarily.”
Nissan plans to start production at the Chennai plant with its Micra compact car, scheduled to be launched in 2010. “Our small car plans are on track and it would be launched in India in the second half of 2010,” Kimura said.
Nissan had earlier said it would compete in the entry-car segment with a dedicated new A-platform that will be used for at least three models, including the next generation of Micra.
“Our investment commitment of Rs 4,500 crore in India stands. Our aim is to have an eventual capacity of 4,00,000 vehicles per annum in the Chennai plant, but we will start with 2,00,000 units,” Kimura said. Nissan already sells the XTrail sports utility vehicle and the Teana luxury sedan in India. The company will introduce new variants of the Teana and the X Trail in India this year, he said.
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