Following the signing of a memorandum of understanding (MOU) today, Chennai, in the state of Tamil Nadu, has been announced as the location of what will potentially be one of the largest automotive production sites in India, with an installed capacity of 400,000 units per year, seven years after its initial production. Automakers Mahindra and Renault will now be joined in this project by Nissan.

Renault, Nissan and Mahindra are committed to investing a minimum of Rs 4,000 crore (€686 million / $902 million) in the site during the next seven years, with an equity holding of 50% by Mahindra and 50% by Renault and Nissan. The project, a unique industrial complex, will provide vehicle production for each carmaker, plus a powertrain facility for Renault and Nissan. The MOU will facilitate M&M and its partners Renault and Nissan to manufacture passenger cars and SUVs in the 925 acre (approximately 400 ha.) facility.

A range of products suited to the requirements of Indian customers will be manufactured at the new production site. Production is expected to begin in the second half of 2009.
Chennai was chosen as the location for the new production site for reasons including its well developed automotive and components industry, high education levels in its workforce, and its overall infrastructure including its port facilities. The addition of this Greenfield project will help make Chennai a truly global player in the automotive business.

The partners will optimize production costs through economies of scale thanks to joint investment in plant and infrastructure, as well as purchasing synergies.

• Renault will contribute its expertise in engineering, manufacturing and adaptation to meet customer requirements.
• Mahindra will contribute its in-depth understanding of the Indian market and supplier base as well as manufacturing through years of market leadership.
• Nissan will contribute with worldwide export opportunities and manufacturing technologies.
Thiru. M. Karunanidhi, Hon. Chief Minister of Tamil Nadu welcomed the triumvirate of Mahindra, Renault and Nissan to Chennai as a base for its greenfield auto manufacturing operations.

Mr. Keshub Mahindra, Chairman of the Mahindra Group, said, “This is a red letter day in the globalization of the Indian automotive space. The choice of location and the expansion of our strategic partnership with Renault to include Nissan are designed to bring world class platforms to the evolved car buyer. The consortium’s state-of-the-art Greenfield facility, which is to be set up on a location in Chennai, speaks of our long-term commitment to India’s evolution as the favored global destination for manufacturing. I laud the efforts of the Tamil Nadu govt. for creating an environment conducive to generating employment opportunities and creating a positive business climate for global players.”

Dr. Pawan Goenka, President, Automotive Sector - M&M said, “This is M&M’s first major manufacturing facility in the state of Tamil Nadu and we appreciate the Tamil Nadu government’s initiative in offering us a gateway to this state and providing the project with the necessary infrastructure to commence operations here. The advantages accrued to the customer by our synergies of cost, scale and engineering promise to set new benchmarks of quality and cost for the auto manufacturing in India. We are pleased to have Renault and Nissan as our partners on this mega project. ”

Patrick Pelata, Executive Vice President of Renault said, “India is a key market for Renault’s international growth ambitions both up to and beyond the limit of Renault Commitment 2009. Thanks to our already successful relationship with Mahindra we will make this new production site in Chennai a great opportunity for both Renault and Nissan.”

Carlos Tavares, Executive Vice President of Nissan commented, “Through the strong partnership of Renault and Mahindra, Nissan is able to leverage the Alliance and gain a rapid entry advantage for local manufacturing in India. Nissan was able to evaluate several different options for our first manufacturing base in India – but the advantages of working with our Alliance partner and their local Indian partner was compelling.”

The Industries Secretary, Government of Tamil Nadu, Mr. S. K. Das said, “It is yet another achievement for the state of Tamil Nadu as we will be hosting the consortium’s facility. This project will be a significant contribution on the part of M&M, Renault and Nissan to our state’s industrial development and fiscal strength”.

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