Renault revives india investment plan on car demand

Renault SA will resume investments in an Indian factory it’s building with affiliate Nissan Motor Co., less than a year after it suspended its plans, as economic stimulus and tax breaks lifted car sales in the country. Renault will introduce two cars in India next year, Marc Nassif, the local country manager for France’s second-largest automaker, told reporters at the New Delhi Auto Show. Renault has spent 100 million euros ($144 million) on the plant in the southern city of Chennai, and with Nissan plans to invest 45 billion rupees ($973 million) by 2015, he said.

“We can expect India to be one of the pillar markets for us,” Katsumi Nakamura, Renault’s executive vice president for Asia and Africa, told reporters in New Delhi. Annual vehicle sales in India, Asia’s fourth-biggest car market, are likely to surge threefold to 6 million units in 10 years, Nassif said. Renault suspended investments in the factory last year after global car demand plummeted amid the worst global recession since World War II. Nationwide vehicle sales in India surged 61 percent in November, the fastest pace in more than five years, according to the Society of Indian Automobile Manufacturers.

The Chennai plant will have an initial annual capacity of 200,000 cars, Renault Nissan Automotive India Pvt. said last year. Renault will also review the future of its venture with Mahindra & Mahindra Ltd. in India that makes the Logan car, Nassif said. The joint venture’s sales plunged 66 percent between April and November, extending a 48 percent decline in the year ended March. Mahindra controls 51 percent of the venture, which started selling the Logan in 2007. Mahindra is in discussions with Renault regarding its joint venture, Anand Mahindra, managing director of the Mumbai-based company, said in Singapore in November.

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Source:http://www.bloomberg.com/apps/news?pid=20601091&sid=aHTievmFC1e0

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