Renault-Nissan to take Production Capacity to 7 Lakh Units by 2015

Japanese car maker Nissan and Renault that are the strategic partners globally including India shares the Oragadam, off-Chennai based plant as well for manufacturing the vehicles in India. Now the ET reports that the Renault-Nissan alliance is now planning to take its production capacity to 7 lakh units by 2015 to deal with the rising demand for the vehicles both domestically and internationally (exports from India). The alliance is also planning several new models in India, for which they surely need to expand their production capacity.

The final decision on the same is expected to happen in the second half of 2013, so the company is already is negotiating with several state governments including Tamil Nadu and Gujarat. People close to the development inform that the alliance is planning to produce 15-17 models by 2016-17 in India. "With mass volume models like Datsun from Nissan and A-Entry from Renault planned in the next couple of years, Franco-Japanese alliance would need additional capacity. The likelihood of alliance expanding in Oragadam, near Chennai, are more as it already have an established set up, but it are also exploring Gujarat, which too has a good port facility for exports," said one of three people in the know of the development.

Toshihiko Sano, MD, Renault Nissan Automotive India however haven't disclosed the specific details said, "We have already set up two manufacturing lines for our existing products. We will have to set up new line for entry-level cars. The decision on the additional line will be taken later this year." In 2012, the alliance increased the production capacity by 2 lakh units per annum, taking the overall annual capacity to 4 lakh units.

The Renault-Nissan alliance is also developing a casting and machining shop, which will help the company move from assembling engines to manufacturing them in India. This will also help the company increase the localisation content to 75 per cent, and to take this percentage as higher as 90 per cent, the company has invited vendors to set up shop in Chennai, so to reduce the logistic cost. "Already 40 of out key vendors have set up shop at Chennai, which has helped us reduce cost by 5-15 per cent depending on the components," added Sano.

Source: ET