Renault and Nissan will team up with local manufacturer Mahindra to build a new vehicle assembly plant in southernIndia, an investment worth a total of more than $900 million.
The new factory will be located in Chennai, formerly Madras . Due to open in 2009, the factory will eventually have the capacity to build 400,000 vehicles a year. On paper, Mahindra & Mahindra will own 50 percent of the plant, while Renault and Nissan each will control a quarter of it.
The factory will produce an unnamed low-cost vehicle for sale under the Renault, Nissan, and Mahindra brands. Nissan also has a deal with Indian automaker Maruti to build a compact car for Europe under the Nissan brand.
India’s rapid economic growth is leading to the development of a middle class with a growing taste for luxuries like personal vehicles. And growth in vehicle sales, while stable in Western Europe and North America, is booming: the Wall Street Journal reports that Indian sales totaled 1.14 million units in the year ending March 31, 2006, up 70 percent in four years.
Other automakers already represented in India include Ford, Hyundai, Toyota , Honda, GM, and BMW. Nissan currently exports vehicles to India . Suzuki operates in a joint-venture with India ’s largest automaker, Maruti, while Fiat has a partnership with number-three Indian automaker Tata.
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