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Renault, Nissan and Mahindra to invest big in India?

Posted by: Ian Rowley on November 9, 2006

Nissan-Renault chief Carlos Ghosn might have failed to nail an alliance with GM, but he looks like having more luck in India. According to reports, later today in Paris, Ghosn will announce that Renault and Mahindra will invest as much as $1 billion to make cars in India.

This development follows Renault and Mahindra agreeing a $125 million deal in March 2005 to build Renault’s low-cost Logan model in India from next year. Not naming sources, Bloomberg reports the extended joint venture will be 50% owned by Mahindra with the rest shared between Renault and Nissan. A new plant will make Logans and eventually churn out a full range of models for both firms. In October, the Times of India reported an expanded alliance could include Renault’s Twingo supermini, Clio compact and Modus mini-multipurpose vehicle.

All of which will likely be ofinterest to Japanese automaker Suzuki, which has a long history in India through its Maruti Suzuki brand. In June, Nissan and Suzuki announced that Suzuki, which already supplies minicars for Nissan in Japan, would build a small car for Nissan in India for export to Europe. In September, Osamu Suzuki, Suzuki’s chairman, said his company had entered into discussions with Nissan to build a new factory capable of making 250,000 vehicles a year in India.

Now, though, Nissan says that with Mahindra on the scene, an additional deal in India with Suzuki is off the agenda. “Nissan is in active discussions with Renault and Mahindra concerning a new industrial partnership and will make a final decision within four months,” Nissan said in a statement issued in Tokyo. “In consequence, we will not continue our discussions with Suzuki concerning a new industrial project in India.” Irrespective of partner, what is clear is that Ghosn’s deadly serious about India.

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