Nissan, Leyland in small truck alliance

The Chennai-based commercial vehicles maker and Japan’s Nissan Motor, in which France’s Renault is the single-largest shareholder, today agreed to form three joint ventures to develop, manufacture and market light commercial vehicles (LCVs). The joint venture will produce 100,000 vehicles annually in the medium term.

Renault already has a joint venture with utility vehicles maker Mahindra & Mahindra, which is rolling out the Logan sedan, and has announced another one with two-wheeler maker Bajaj Auto for a low-cost car.

The first of the three ventures will make Nissan commercial vehicles in India for the domestic market and overseas sales. Ashok Leyland will control a majority stake in the company.A venture for assembling engines and related parts is also on the cards. It will be controlled by Nissan.

The third company, equally owned by the two partners, will develop LCVs and engines, and market them in India and overseas. The products developed will be sold under both the Ashok Leyland and Nissan brands.

The two companies are also thinking of collaborating in sales and distribution. This may include giving Nissan an access to Ashok Leyland’s vast dealer network. Ashok Leyland may use Nissan’s dealer network in identifying export markets.Ashok Leyland expects to sign a final agreement with Nissan in October after completing a feasibility study.

Mahindra, Renault, Nissan to pay JV fee, share Chennai unit equally

The yet-unnamed joint venture of Mahindra and Mahindra Ltd, its subsidiary Mahindra-Renault Pvt. Ltd, and Nissan Motor Co. that will make four lakh vehicles a year from 2009, will be a contract manufacturer with the three companies equally sharing the capacity, said Pawan Goenka, president (automotive), Mahindra and Mahindra. He added the company was in talks with Nissan to market its cars in India similar to the venture it has with Renault for the Logan sedan.

The joint venture company would not develop or sell cars on its own, said Goenka. The three companies, which would market the products made by the venture, will pay a fee to it in proportion to the goods manufactured.

“Mahindra’s greatest advantage is to get access to the technology of Nissan and Renault through this plant in Chennai,” said Umesh Karne, senior research analyst with Emkay Share and Stock Brokers Ltd. “The joint venture company will be developing cost-advantageous products. So, royalty (fee for manufacturing) would not be an issue.”

Global players such as Fiat SpA and Nissan Motor Co. are entering into contract manufacturing alliances with Indian companies to gain from the low cost of manufacturing in the country and benefit from economies of scale.

Nissan Motor Co. has a tie-up with Maruti Udyog Ltd, which sells one of every two cars sold in the country, to make 50,000 units a year of a small car, which it will export to Europe. Fiat SpA and Tata Motors Ltd are spending Rs4,000 crore to build a factory in Pune which will roll out models designed by the two companies.

Mahindra and Mahindra will hold a 50% equity in the contract manufacturing unit; the chairman and CEO will also be its appointees. Nissan and Renault will work out how to split the other half between themselves.

Read more in The Livemint article

Mahindra-Renault launch Logan

Fuelling competition in the Indian mid-size car market, Mahindra-Renault on Tuesday unveiled 'Logan' - an entry-level no frills sedan - with prices starting at Rs 4.28 lakh for the base petrol variant.

The joint venture company between India's Mahindra and Mahindra and French auto maker will be rolling out 50,000 units of Logan this year from Mahindra's Nashik facility set up at a cost of Rs 700 crore.

While the 1.4 litre petrol engine variant is priced at Rs 4.28 lakh (ex-showroom Mumbai), the 1.61 litre carries a price tag of Rs 5.69 lakh. The 1.5 litre diesel engine car, which has two variants, comes at a price of Rs 5.47 lakh to Rs 6.44 lakh.
Initially, Logan will hit the roads in the top 10 cities of the country in the second week of this month.

Read more in The Times of India article.