News: Renault's Ghosn has Rs 1.35 lakh car in mind

(DNA 05/04/2007) Nashik - Carlos Ghosn, chief executive of French carmaker Renault and also Nissan Motor Co, Japan’s third-largest car-maker, has hinted that his company may co-produce a small car with Mahindra & Mahindra that would cost $3,000 or about Rs 1.35 lakh.

That will pit it directly with Ratan Tata’s dream small-car project, which is expected to cost about the same in the buyer’s hand.

“For the Indian car market, it would be crucial to enter the volume segment. And for that a $3,000 price-tag (Rs 1.5 lakh) would be the threshold limit,” Ghosn said — hinting at the thinking process in the alliance.

Nissan will build two small-car platforms at Mahindra Renault’s Nashik facility in two years time. The small cars produced here will be sold overseas initially.

The Japanese major will later introduce a wide range of vehicles from its portfolio in India, Ghosn said. He did not elaborate on the timeframe or specific models.

Nissan will follow rivals such as Suzuki Motor Corp and Hyundai Motor Co in making small cars in India, a segment that makes up more than two-thirds of the 1 million-plus cars sold in the country each year.

Low-cost countries such as India, China, Thailand and Brazil will become major players in the global automotive market, Ghosn said.

Nissan, which cut its profit forecast on lower-than-expected demand in US and Japan, is betting on emerging markets such as India, Brazil and China for growth.

The Nissan-Renault-Mahindra venture expects to start the Chennai plant in the second half of 2009 and reach annual production capacity of 400,000 vehicles within seven years, the automakers said on a conference call on February 26.

The venture has yet to be allotted land by the state government for the factory, which will include a power-train plant for Renault and Nissan.

Ghosn will travel to Chennai on Thursday to hold discussions with state government officials on the project, he said.

Mumbai-based Mahindra has an alliance with Renault, France’s second-largest automaker, to make and market Logan sedans in the country. The Logan, introduced in India yesterday, is the first product of the venture.

Mahindra last year agreed to build the Logan that Boulogne-Billancourt, France-based Renault designed.

The Logans will be built at Mahindra’s factory at Nashik that can produce as many as 50,000 cars a year.