Home / Companies / Nissan plans hatchback to launch India facility

Japan’s Nissan Motor Co. Ltd plans to launch its manufacturing operations in India with a car modelled on the popular Micra,a compact car that turned 25 last year, thereby debutingin a segment that accounts for around 75% of cars sold in India.

Driving in: Nissan has been selling its X-Trail sports utility vehicle (above) and Teana sedan in India by importing them.

The car will be made at the Chennai plant the company is setting up with its partner Renault SA at a cost of Rs4,500 crore. The plant is expected to start production in early 2010.

Three vendors familiar with the development said Nissan Motor India Pvt. Ltd, the Indian subsidiary of the Japanese firm, has handed out key contracts for sourcing parts for two models. Nissan will launch a basic entry-level car, code named W02A, and follow it up some months later with a higher-end entry-level car, WO2B, said the vendors, who did not wish to be identified.

Micra is a hatchback, a configuration where the boot is integrated with the main compartment but opens from the back.

Neeraj Garg, director, marketing and sales, Nissan Motor India, confirmed that the company will launch its production facilities in India with a hatchback, but declined further details saying the company is still finalizing its product plan.

“By 2012, we plan to have eight products in the market, of which a few will be imported. We will also export cars manufactured here in completely built-up form as per current plans," he added.

According to the vendors, Nissan will start producing 180,000 units of the two cars once the Chennai facility is ready, and export a significant proportion of the output to Europe. The plant has a capacity to produce 400,000 cars a year.

Micra, made at Nissan’s Sunderland plant in the UK, is the European name for the company’s March super mini, which first went on sale in Japan in 1982. The car has since spawned many variants and seen as many facelifts.

In the 12 months to March, Indian car makers sold 12,03,531 units, 11.79% higher than what they sold the previous year in the domestic market, according to the data released by the Society of Indian Automobiles manufacturers. Demand, especially for small cars, is rising on the back of higher salaries.

The result has been frenzied action by car makers with several launches, including Toyota Motor Corp., Ford Motor Co., Volkswagen AG and Honda Motor Co. Ltd announcing plans to start making small cars in the country. All of these plants are scheduled to start production by 2010.

Nissan is also working on plans to manufacture engines at its Chennai plant, said the vendors. Two engines, code named xh2 and xh5, are planned to be made initially.

Micra or March car is available with a variety of petrol and diesel engines in Asian and European markets. The model underwent its latest facelift in 2007 and Nissan is expected to launch its successor sometime in 2009.

Meanwhile, work has started on the Renault-Nissan alliance’s new manufacturing plant, which was delayed after Indian partner Mahindra and Mahindra Ltd decided to opt out of a three-way joint venture to manufacture cars.

The project also encountered land acquisition problems in the initial phase, but “work has commenced on the land where our plant will come up," Garg said. Since it set up operations in India in February 2005, Nissan Motor India has been importing and selling Nissan vehicles such as the X-Trail sports utility vehicle and the Teana sedan.

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