Renault-Nissan combo to invest another $2.5 bn in India

The combination of Renault SA and Nissan Motor Co Ltd will invest $2.5 billion in India over the next five years, Renault-Nissan Alliance chief executive Carlos Ghosn said in Chennai today.

The Franco-Japanese alliance joins global carmakers which are spending large amounts on plant expansion, product development, and marketing despite slowing automobile sales in the country.

The Renault-Nissan tie-up has already made investments worth $2.5 billion in India, including on a technology centre and on the development of a cheap car platform, Ghosn said at a media briefing. "I think you can count that the 2.5 will double in the next five years."

Ghosn said India can be among the top five markets for Renault, without setting a time frame for when this target will be achieved; and India can emerge as a top ten market for Nissan as well.

Production will begin in Chennai in 2015 for the Indian market, Ghosn said.

India's contribution today is relatively small as the volumes are small, he said. ''We are selling globally 8 million cars and a 160,000 cars contribution by India to the bottomline of the alliance is small. But the potential is very big; we are building in India a base that will be substantial both for Renault and Nissan.

''For Renault, the number one market is France, the second is Russia, and the third is Brazil, and India can join the top five markets for Renault, while for Nissan, it can become one of the top ten markets. The most important thing is, it is a proving ground for products going to Indonesia, African countries, South America; if the consumer likes it in India, the product is ready for global markets.''

To make India a hub for developing cars for the growth markets, Renault-Nissan announced that all-new vehicles from the alliance will be built on its CMF (common module family) platform, which is one that all the alliance brands from Renault and Nissan to Datsun can use.

The CMF approach defines vehicles as five essential modules: the engine bay, cockpit, front underbody, rear underbody and electrical and electronics architecture. The compatible parts can then be assembled into hundreds of possible configurations for maximum efficiency and brand differentiation.

Renault-Nissan is also preparing to launch low-cost cars on the jointly developed platform in 2015 aimed at emerging markets such as India.

Separately, Christian Mardrus, alliance managing director for logistics, said the two companies expect to achieve joint savings of €3.5 billion in 2015 as they pool more of their operations. Renault and Nissan had previously set a joint savings goal of €4 billion in 2016.

Nissan had on Monday said it would manufacture cars from its revived Datsun brand at the Chennai plant, and sell them for less than Rs4 lakh each in India from next year.