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Renault-Nissan eyes auto-parts industry

Renault-Nissan eyes auto-parts industry
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First Published: Wed, Feb 21 2007. 02 26 AM IST
Updated: Wed, Feb 21 2007. 02 26 AM IST
Pune: India’s auto component-manufacturing community is in top gear. Odile Desforges, CMD of Renault-Nissan Purchasing Organization (RNPO), will be here next week. Sources familiar with the development say a high-powered delegation will be visiting India looking for auto components worth $1 billion. RNPO is the buying arm of the Renault-Nissan alliance.
The visit is significant for the local auto component manufacturing firms as RNPO is responsible for selection of suppliers worldwide. As of April 1, 2006, it had handled 72% of the alliance’s purchases, representing nearly $61 billion. Moreover, based on the profile of 100 main Renault and Nissan suppliers, 64% of suppliers work both for Renault and Nissan.
The Indian auto component industry produced goods worth $10 billion in FY 2005-2006 and has been growing at 15%, according to the Automotive Component Manufacturers Association of India (ACMA). In 2005-06, the industry exported 1.8 billion worth of goods against $1.4 billion in the previous year.
The list of items that are exported includes piston rings, gaskets, engine valves, fuel pump nozzles, fuel injection parts, filter and filter elements, radiators and gears.
The RNPO team will meet a select group of suppliers in western India to target the country’s low-cost, high-quality components for their global needs. Sources close to the development told Mint that Desforges, who is also the head of purchasing for the French car-manufacturer, will arrive in India with a high-level team, including RNPO joint managing director Hiroto Saikawa. Saikawa is executive vice president of purchase for Japanese car maker Nissan.
Desforges’ visit to India is indicative of Renault’s willingness to step up its presence in the country ahead of its plans to make 500,000 cars here in collaboration with Mahindra & Mahindra. The two companies already have a joint venture to manufacture the Logan, the most economical sedan in Europe. It is expected to be launched in the first quarter of financial year 2007-08 beginning April.
The joint venture’s second plant for 500,000 cars, at its peak capacity by 2012, may start production in 2009 with initial capacity of 300,000 cars. The plant will manufacture variants of the Logan.
Company sources told Mint the high-level team would meet a select group of vendors who have already been working with it for the Logaan. “For RNPO, the Logaan was the learning curve and those vendors are now going to be taken on board for their future global requirement,” they said.
An e-mail sent to Gilles Dufour, vice president, Mahindra Renault pvt Ltd and RNPO’s representative in India failed to elicit any response. In November 2006 Renault CEO Carlos Ghosn had announced his company would make 500,000 cars in India with M&M. Ghosn, also head of Nissan, also announced that Nissan is likely to join the joint venture. Nissan, it may be recalled, had earlier explored the possibility of putting up a 200,000-unit production plant in India on its own.
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First Published: Wed, Feb 21 2007. 02 26 AM IST
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