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Nissan's Rs.1.3 lakh India car to boost profits

 

Nissan Motor Co’s planned $3,000 (Rs 1.33 lakh) car for the Indian market will increase the company’s profitability, as it takes advantage of its local partner’s low-cost production techniques, a company executive said.

In talks with Bajaj Auto Ltd, “we discovered that their margin on three-wheeler activities is by far above our current margin on our four-wheeler activities,” Gilles Normand, Nissan’s corporate vice-president in charge of Africa, West Asia and India, said in an interview yesterday in Yokohama, where Nissan is based. The low-cost car “will contribute to our growth in terms of volume and profitability”.

 

Nissan may post an operating margin of 4 per cent for the year that ended March 31, according to a company forecast, compared with Bajaj’s 10.5 per cent for the year that ended in March 2009. The Pune-based company didn’t make a forecast for the most recent financial year.

The Japanese car maker plans to introduce a low-cost vehicle in 2012 to compete against Tata Motors Ltd’s $2,500 Nano, the world’s cheapest passenger car, and take advantage of Indian expertise in low-cost production. About 50 per cent of the Indian four-wheel auto market consists of models priced below $8,000, Normand said.

Bajaj is India’s largest maker of three-wheeled auto rickshaws. “Just because the three-wheeler is cheap with high margins, doesn’t necessarily mean Nissan’s car will be, too,” said Koji Endo, managing director of Tokyo-based Advanced Research Japan.