The Renault-Nissan alliance plans to expand its Chennai manufacturing facility in the Indian state of Tamil Nadu, reports DNA Money newspaper, citing a state government official. The report says that the alliance is expected to make an investment of nearly INR50 billion (USD793.6 million) in the plant. "Renault-Nissan wants expansion of the existing plant and they are looking at a total investment of INR50 billion for the expansion. We already have an MoU [memorandum of understanding] with them of INR45 billion, and this will be in addition to that. Work has started and the timeline given to them is usually of seven years," C V Sankar, additional chief secretary (industries department) of the state government, is quoted as saying.
Significance: The Chennai plant, one of the biggest automotive manufacturing facilities in India, has a production capacity of 220,000 units annually, according to IHS Automotive's production database. This is expected to rise to 280,000 units in 2016 and to 360,000 units in 2019. Combined production of the Renault, Nissan, and Datsun brands at the plant stood at nearly 219,000 units last year. Although both Renault and Nissan are marginal players in the Indian market, Nissan uses the facility as a manufacturing base and exports vehicles made there to several countries in Southeast Asia and Europe. The Japanese automaker overtook Maruti Suzuki to emerge as the second biggest vehicle exporter from India last year. Investment in additional manufacturing capacity in India is required for both automakers, which have ambitious plans to compete with market leaders in volume segments.
