Chennai, Feb 22: Global auto majors Renault and Nissan today signed an MoU with the Tamil Nadu Government for setting up an integrated greenfield automotive facility at Oragadam, near here, with a minimum investment of Rs 4,500 crore. Mr Patrick Pelata, Executive Vice President, Product, Plan and Programmes, Renault and Mr Carlos Tavares, Executive Vice President, Corporate and Product Planning, Nissan signed the MoU in the presence of Chief Minister M Karunanidhi at the Secretariat.
Later talking to newsmen, Mr Pelata and Mr Tavares said the 50:50 Joint Venture (JV) had committed minimum investment of Rs 4,500 crore for an installed capacity of four lakh vehicles per annum within seven years from the date of agreement. The state-of-the-art industrial complex, coming up on 670 acre, will enable vehicle production for each carmaker and a power train facility.
Production is expected to start in the beginning of 2010. Both the companies will optimise production cost through economy of scale, thanks to joint investment in plant and infrastructure as well as purchasing synergies.
The plant would produce a wide range of products for both partners suited for Indian markets and exports, but mainly for Nissan.
''India represents a strategic market for the Renault-Nissan alliance with high growth potential in numerous segments.
''Today's MoU confirms the Renalut-Nissan Alliance's commitment to the Indian market. Renault has been selling the 'Logan' sedan with local partner Mahindra and Mahindra since May 2007.
''As of January end this year, 'Logan' had already captured 12 per cent market share in the 'C' segment with more than 20,000 vehicles sold since launch placing it third in the segment,'' they said.
Nissan recently concluded a master co-operation agreement with Ashok Leyland to form JVs for development and production of LCVs and LCV power trains, they added.