Renault-Nissan to develop cheap cars in India for global markets

Barely a day after re-launching the Datsun brand, Franco-Japanese alliance Renault Nissan on Tuesday announced a joint vehicle development programme, Common Module Family-Affordable (CMF-A), to design, develop and build vehicles solely in India.

The programme, headed by Gerard Detourbet, is the first joint programme by the two partners of the 14-year-old alliance, and underlines the growing importance of India in Renault Nissan's stated objective of selling more than 10 million cars globally by 2016.

'We are breaking new ground with CMF-A to meet and exceed the high standards of consumers in the world's fastest growing economies — particularly people buying a new car for the first time,' said Carlos Ghosn, CEO and chairman, Renault Nissan.

'Why we are doing this in India is because in terms of frugal engineering, this country is second to none, and if we can make a car and sell it successfully here it guarantees a market in many other emerging countries,' he said.

CMF will also see the alliance double its investment in India to $5 billion in the next few years. The first car developed under the programme will be ready by 2015.

The scope of the CMF-A will also include an ultra-low cost car to compete with the Tata Nano, a long cherished dream of Ghosn that a short foray with Bajaj Auto failed to realise. 'We will not mimic a Nano but offer a high value product at price that is not very far from that,' he said.

Notwithstanding the slowdown in the domestic automotive industry, whose growth has declined for eight straight months, Ghosn said there was no question about the potential of the market.

'In the US, 800 out of 1,000 people own a car. For Europe it is 600, Russia 280, Brazil 200, China 60 and India is only 15,' he said. 'That is one of the lowest in the world. There is potential for India to be among the top five markets for Renault and top 10 for Nissan. We expect this market to grow from 3.2 million today to 4 million by 2016.'

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