Nissan, Renault, Mahindra nearing India accord

Tokyo, Jan 22: Talks between car makers Nissan Motor Co. , Renault SA , and Mahindra&Mahindra Ltd. over a possible joint project in India are speeding up and an announcement could come sooner than expected, a top executive at Nissan said.

Nissan is looking for a way into India's booming car market and said in early November it would decide within four months whether to join a partnership between Mahindra and France's Renault there.

Nissan Chief Operating Officer Toshiyuki Shiga said on Monday the talks were proceeding ''faster than expected'', and an announcement would likely be made jointly by the three companies.

He also said the auto maker had no immediate plans to set up its own car factory in India.

The Nikkei business daily reported earlier this month that in addition to the possible three-way project, Nissan would build its own 200,000 unit-a-year car plant with an initial investment of 50 to 60 billion yen (0-500 million).

''(An independent plant) is not under consideration right now,'' Shiga told reporters on the sidelines of an event to launch the new Pino minicar in Japan.

Renault, which holds 44 percent of Nissan, and Mahindra are due to build a plant to assemble 500,000 cars a year from mid-2009.

Shiga declined to go into details about Nissan's plans, including the type of car it would bring to India where cheap, small cars with specifications unique to the country make up roughly 70 percent of the market.

Nissan has a separate agreement with Japan's Suzuki Motor Corp. under which the mini-vehicle maker will build a new small car in India under Nissan's badge, mostly for export to Europe starting in 2008.

Suzuki dominates the Indian market through its majority ownership of national auto maker Maruti Udyog Ltd. .

Other Japanese auto makers such as Toyota Motor Corp. are looking to boost their tiny presence but face hurdles without economies of scale and products in the most popular ultra-cheap, compact segment.

Nissan currently sells only the imported X-Trail sport utility vehicle in Asia's fourth-biggest economy, with sales totalling 190 units last year. India's passenger vehicle market is forecast to double to 2 million units by 2010.

Nissan and Suzuki have agreed to supply each other with vehicles under an original equipment manufacturing (OEM) agreement and share manufacturing facilities around the world.

Suzuki, which builds Nissan's new Pino car, separately announced on Monday it would begin selling a minivan in Japan manufactured by Nissan under the Suzuki badge.

Nissan shares ended up 2.2 percent at 1,507 yen, outperforming the transport sub-index <.iteqp.t>, which was virtually unchanged.

Reuters
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