MM, Renault, Nissan zero in on Chennai for car unit

New Delhi, Feb 26: Commercial vehicles major Mahindra&Mahindra, France's Renault and Japan's Nissan have signed an MoU to set up their four-lakh-units per year plant in Chennai at Rs 4,000 crore to be invested over seven years.

The plant, spread over 925 acres, will manufacture passenger cars and SUVs to compete with their counterparts like Maruti Udyog.

M&M will own 50 per cent in the venture, while the rest will be held by Nissan and Renault jointly.

''The project, a unique industrial complex, will provide vehicle production for each carmaker, plus a powertrain facility for Renault and Nissan. A range of products suited to the requirements of Indian customers will be manufactured at the new production site.

Production is expected to begin in the second half of 2009,'' M&M said in a statement today.

The company will contribute its understanding of the Indian market, supplier base and manufacturing to the project.

While Renault will contribute its expertise in engineering, manufacturing and adaptation to meet customer requirements, Nissan will contribute worldwide export.

Renault, which owns 44 per cent in Nissan, already has a joint venture with M&M to manufacture logans in Maharashtra.

''The partners will optimise production costs through economies of scale thanks to joint investment in plant and infrastructure, as well as purchasing synergies,'' M&M said.

Chennai was chosen as the location becauce of its well-developed automotive and components industry, high education levels in its workforce, and its overall infrastructure including its port facilities, it added.

''This is M&M's first major manufacturing facility in Tamil Nadu and we appreciate the state government's initiative in offering us a gateway and the necessary infrastructure to commence operations,'' M&M President (Automotive Sector) Pawan Goenka said.

UNI