Nissan in talks with Leyland for small car



Japanese car firm Nissan is in talks with Hinduja group company Ashok Leyland for developing a small car that will operate in the segment currently dominated by the Maruti Suzuki Alto.

Speaking to Indian journalists here on the sidelines of the Geneva Auto Show, Carlos Ghosn, the CEO of Nissan & Renault, said: “We are studying the possibility of tying up with Ashok Leyland and some other manufacturers in China and Indonesia for a small car project.”

In India, the car could be positioned between the Tata Nano at the lower end and Maruti Swift at the upper end of the small car market.

The tie-up with Bajaj Auto for an ultra low-cost car in the Nano price bracket continues. While Nissan said no fresh progress had been made on this alliance, Ravi Kumar, vice-president, business development, Bajaj Auto, declined to comment.

Meanwhile, the company today launched its fourth-generation car, Micra. Production begins later this month at Nissan’s new plant in Chennai and the car goes on commercial sale in May. It is likely to be positioned in the B-segment and priced between Rs 3.8 lakh and Rs 5 lakh.

According to the agreement with Bajaj Auto in November last year for the ultra low-cost car, Bajaj will be responsible for the design, engineering, sourcing and manufacturing and the Renault-Nissan alliance for marketing and selling.

Nissan Motor Co-Executive Vice-President Collin Dodge said: “We have a formal agreement with Ashok Leyland for making light commercial vehicles in India. In addition to that, we also use Ashok Leyland’s engineering services for various purposes. At the moment, we are talking to them and many other partners.”

He said the global small car is aimed at tapping the price bracket of $4,500-5,000, which is set to grow substantially and account for around “20 per cent of the total global car sales in due course of time”.

“There may be an opportunity with Ashok Leyland on a price-centric car,” Dodge added.

He said none of the big global carmakers like Volkswagen, General Motors or Ford could produce a small car at such a cheap price without partnering with local firms already involved in low-cost production. Asked which country would be the lead market for such a small car, Mr. Dodge said, “China will be the number one as the segment is growing in a big way there with about two million units. India will be the second market.”

Other countries like Indonesia, Vietnam, Brazil, Colombia and some more Latin American nations are also possible markets, he added.

At present, Nissan and Ashok Leyland are partners in a light commercial vehicles joint venture. The two firms had announced three joint ventures in 2007 for making LCVs, power trains and developing technology, and setting up a plant near Chennai, envisaging a total investment of Rs 2,300 crore.

The two companies had formed Ashok Leyland Nissan Vehicles Pvt Ltd in which the Indian partner has 51 per cent and the rest is held by Nissan, to manufacture LCVs. Ashok Leyland had earlier said it would have no joint branding with Nissan for the LCVs.

The joint venture, at present, is developing both trucks and buses in the three- and six-tonne categories.

There has been a delay in setting up the manufacturing plant owing to land acquisition problems so the partners have started producing LCVs from their respective facilities and plan to launch them by 2011.

Ashok Leyland Nissan Vehicles had set an initial target to produce 100,000 units and the two partners had signed an agreementwith the Tamil Nadu government to set up an integrated plant at Pillaipakkam, 40 km from Chennai

On the Micra, Shiro Nakamura, senior vice president and head of design at Nissan, said that the car is in keeping with Nissan’s design language of being “provocatively modern.” “The in-your-face design language is in keeping with the Nissan GT-R and 370Z sports cars,” he said.

The first of the V-platform cars, the Micra is to be powered by a 1.2-litre petrol engine producing just 115 g/km of CO2 and a 1.5-litre dCi diesel engine as found in the Mahindra Renault Logan in India.

Ghosn also said a more efficient engine with 95 g/km of CO2 will be launched internationally in the next few months.

Asked about the Mahindra-Renault joint venture and the likelihood of it ending, Ghosn said, “Just because one product didn’t do well doesn’t mean that the joint venture is over. I am in India later this month and you will hear more on it then.”

In mid-February, Mahindra  had said that it hoped to come out with an announcement in the next 45 days.

Nissan also launched a small crossover called the Juke for Europe, Japan and the US. Powered by a 1.6-litre petrol engine, it is Nissan’s fourth crossover. With compact cars and crossovers, Ghosn said he hoped to achieve global sales of one million compact cars by 2013 and hoped that with products like the Micra, Nissan could increase its global presence from 80 per cent of the world markets to 94 per cent.