Nissan compact car Micra to roll out from Chennai plant

Presently, Micra is rolling out from Nissan's plant in Sunderland, UK. However, Nissan plans to begin production of a new compact fuel-efficient car from 2010 while Micra, which will be redesigned, will begin rolling out from Nissan's stable in Chennai.

Earlier, Nissan said it would stop producing Micra at its plant in Sunderland, putting at least 1200 jobs at risk. However, the UK government managed to convince Nissan to manufacture a new car and granted the automaker tax incentives valued at £6.2 million ($12.2 million).

The British government's grant covers just under half of the £13.2 million required for the changes at the Sunderland factory, Nissan said.

The plant which employs 4700 workers and rolls out over 350,000 vehicles every year, catering to the demand of Europe and the UK, will also continue producing hatchback Note as well as popular SUV Qashqai.

The Chennai plant will manufacture Micra as well as two other models, a Nissan official said.

According to Nissan design director Shiro Nakamura, the new Nissan Micra, which is already in the design stage, will adopt a more conventional and aggressive or sporty look that will appeal to the male buyers.

"There will still be a strong family look, but we do need to attract more male buyers," Nakamura said.

Micra will be sold in five leading competitive countries (LCCs) including India and Thailand.

The Renault-Nissan alliance will invest Rs.4000 crore ($1 billion) on the Chennai plant where 400,000 vehicles would be manufactured annually under both the brand names.

While Renault has tied up with Mahindra & Mahindra in selling its Logan model in India, Nissan is currently offering the SUV X-Trail and the Teana car to its Indian customers.

Renault-Nissan has a tie-up with Bajaj Auto for its small car project in India while Nissan has entered into an agreement with Ashok Leyland to produce commercial buses and trucks.

Besides Renault-Nissan, other carmakers have expressed interest in developing and marketing the small car in India.

Toyota Kirloskar Motor (TKM), the automotive joint venture between Japan's Toyota Motor Corp. and India's Kirloskar Group announced in April that it will invest Rs.1400 crore ($350 million) on a new plant in Bangalore from where it will roll out its small car in a bid to tap the largest segment of car market in India.

The Indian small car market is dominated by market leader Maruti Suzuki, which controls over 50 percent of the market. However, in January, Tata Motors challenged its leadership by unveiling its ultra low-cost car Nano. Tata's Nano and the popular Indica are expected to be pitted against Maruti Suzuki's small car offerings - Alto, Maruti 800, Wagon R and Zen. Keeping pace is South Korea's Hyundai Motors, which has tasted success with its Santro and the new i10 models.

Also entering the small car market is Toyota's Japanese rival Honda, which has set up its second manufacturing plant in Rajasthan to launch a small car by 2009. World's third largest automobile manufacturer, the US-based Ford Motor Co. said it would invest $500 million in India to make a small car that will have a sticker price as low as $7,500. Germany's Volkswagen AG also said it would also start to make small cars at a new plant around 2010.

Annual passenger vehicle sales are forecast to rise to 2 million units by 2010 in India and analysts say Indian car sales would more than quadruple to $145 billion by 2016, making India's car market attractive for automakers.

ABOUT RENAULT-NISSAN ALLIANCE

Renault and Nissan entered into an alliance in 1999, linked by cross shareholdings. French carmaker Renault is the single biggest shareholder of Nissan Motor Co, Japan's third biggest automaker, owning 44.3 percent, while Nissan, in turn, holds a 15 percent stake in Renault.