New Delhi: Mahindra and Mahindra Ltd may allow partners Renault SA and Nissan Motor Co. take advantage of its $100 million research facility in Chennai subject to the French company helping the vehicle maker, according to president (automotive) Pawan Goenka.
“If Renault decides, as we move along, to do a lot more with us in engineering, either as a Mahindra engineering services (outsourcing) or joint product development, then it is possible Renault will have something there (the research and development centre),” Goenka said.
“But we’ll not be giving it to them if it’s just Renault,” he added. “Only if they are collaborating with Mahindra.”
The research facility, called Mahindra Research Valley, will be spread over 70 acres in Mahindra World City, the group’s special economic zone near Chennai, and employ 2,000 people. Mahindra plans to brings its research and development operations spread across the country under this single facility.
“We are working out what synergies there could be for the Chennai project,” said Neeraj Garg, director, marketing and sales, Nissan Motor India Pvt. Ltd.
With one of the highest pools of technical manpower in the word, India is increasingly becoming home to part of the R&D operations of auto companies such as General Motors Corp. and Honda Motor Co. The cost of an engineer in India is about one-fifth that of a similarly qualified person in the US. This has also prompted firms such as Ashok Leyland Ltd and Eicher Motors Ltd to start engineering services firms which do design and development work in India for overseas companies.
Mahindra is among the few Indian companies to have designed a passenger vehicle from scratch, the Scorpio in its case. Some car makers, such as Maruti Udyog Ltd, have typically opted to get designs from the parent company (Japan’s Suzuki Motor Co. in Maruti Udyog’s instance), so they can save on costs and get the latest in design.
Mahindra and Mahindra, Nissan and Renault are spending Rs4,000 crore to jointly build a factory that will manufacture cars and utility vehicles for the three companies.
The factory will churn out 400,000 vehicles a year starting 2009.