Renault, Nissan ink MoU with Tamil Nadu Govt for setting up $1.1 billion assembly plant

"Truly this plant in India would be a global business hub for Nissan," Carlos Tavares, executive vice-president, Nissan Motor said.

"India, one of the fastest-growing car Markets and one of the most competitive supply bases in the world, will play a key role in Renault's growing global presence. With the Chennai plant, Renault wants to build a full lineup for India, following the current success of Logan. In addition, we are also talking to Bajaj Auto for the small-car project," Patrick Pelata, executive vice-president, Renault, said.

Originally, the plant was to be set up with Mahindra & Mahindra, the local partner of Renault and Nissan, but Mahindra & Mahindra withdrew from the project after the alliance's decision to make a car costing less than $3,000 with motorbike maker Bajaj Auto.

According to market observers, Mahindra & Mahindra pulled out of the deal as it felt the

Chennai plans of the alliance would not fit with its own plans of expansion. However, Mahindra & Mahindra continues to be a partner of Renault for the no-frills Logan in India since May 2007.

Nissan is also partnering with India's leading bus and truck maker Ashok Leyland Ltd that will see about $500 million being invested in three joint ventures in India for light commercial vehicles, engines and other components.

Renault has a 44 percent stake in Nissan and their alliance is the No.3 automaker in the world after General Motors and Toyota Motor.