Renault-Nissan joint venture (JV) is in full swing with its expansion plans in India and is aiming to double its production to 8,00,000 cars at its Chennai plant by 2015-16, said people close to the JV.
Renault and Nissan are gearing to take competition head on by having at least 20-22 cars between them across categories in the next 4-5 years which will help them challenge market leaders like Maruti Suzuki and Hyundai India.
Both the companies plans to penetrate all categories, right from entry-level cars to premium SUVs as well as sedans. Aiming at cross badging, the JV plans in replacing the branding trademark of one product to another to save on design and development cost of an all-new model. This would be a key strategy for this new product portfolio.
Currently Renault-Nissan is considering cross badging of Nissan Sunny, Renault Duster and Nissan Evalia over the next few years with the aim of cutting development cost and lead time to launch their products in a buzzing Indian market.
But all the models presented in the cross badging strategy would be like the hatchback Pulse, where Renault products will be priced at a premium over the Nissan brand.
"We have increased the production capacity from 200,000 units per year to 400,000 from April, 2012. As demand increases in local and export markets, we keep exploring options of expanding the business", said Mr. Takayuki Ishida, Managing Director, Nissan India.
"It's too early to comment on any specific number on additional capacity creation or locations for new investment, if any," he added.
The JV will manufacture 3,00,000 cars, of which over 70% will be exported. However going ahead, the plan is to increase domestic volumes, and bring down export component to less than 30-40%.
The company is targeting 90-95% localisation by 2013 itself, and is putting an ecosystem in place to achieve this. Out of the total supplier base of 225 companies, 60% of the suppliers are already located in and around Chennai and 25 more are likely to set up plants soon.
Currently over 2,000 engineers and technicians are working at the JV's common R&D center in Chennai on various projects for domestic and global operations of Renault and Nissan.
India is strategic to Nissan's goal of achieving the Power 88 plan; 8% global market share and 8% profitability by 2016, and the car maker is aiming to have 450 dealers by then.
"The plan looks too aggressive for someone who has just entered the Indian market. Taking on leaders like Maruti and Hyundai will be a tough task. On the production front, they have done a smart thing by sharing cost on manufacturing and development, but creating distinctive a brand image in the minds of the consumer will be the key towards achieving their goal," said Ramakrishnan, Senior Director (Automotive) Frost & Sullivan.
Renault and Nissan are gearing to take competition head on by having at least 20-22 cars between them across categories in the next 4-5 years which will help them challenge market leaders like Maruti Suzuki and Hyundai India.
Both the companies plans to penetrate all categories, right from entry-level cars to premium SUVs as well as sedans. Aiming at cross badging, the JV plans in replacing the branding trademark of one product to another to save on design and development cost of an all-new model. This would be a key strategy for this new product portfolio.
Currently Renault-Nissan is considering cross badging of Nissan Sunny, Renault Duster and Nissan Evalia over the next few years with the aim of cutting development cost and lead time to launch their products in a buzzing Indian market.
But all the models presented in the cross badging strategy would be like the hatchback Pulse, where Renault products will be priced at a premium over the Nissan brand.
"We have increased the production capacity from 200,000 units per year to 400,000 from April, 2012. As demand increases in local and export markets, we keep exploring options of expanding the business", said Mr. Takayuki Ishida, Managing Director, Nissan India.
"It's too early to comment on any specific number on additional capacity creation or locations for new investment, if any," he added.
The JV will manufacture 3,00,000 cars, of which over 70% will be exported. However going ahead, the plan is to increase domestic volumes, and bring down export component to less than 30-40%.
The company is targeting 90-95% localisation by 2013 itself, and is putting an ecosystem in place to achieve this. Out of the total supplier base of 225 companies, 60% of the suppliers are already located in and around Chennai and 25 more are likely to set up plants soon.
Currently over 2,000 engineers and technicians are working at the JV's common R&D center in Chennai on various projects for domestic and global operations of Renault and Nissan.
India is strategic to Nissan's goal of achieving the Power 88 plan; 8% global market share and 8% profitability by 2016, and the car maker is aiming to have 450 dealers by then.
"The plan looks too aggressive for someone who has just entered the Indian market. Taking on leaders like Maruti and Hyundai will be a tough task. On the production front, they have done a smart thing by sharing cost on manufacturing and development, but creating distinctive a brand image in the minds of the consumer will be the key towards achieving their goal," said Ramakrishnan, Senior Director (Automotive) Frost & Sullivan.
This article was Posted by:
Kurian Akkara
Source: News @ Economic Times
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