In what promises to be a new chapter for the Franco-Japanese alliance in India, the company is going to develop, manufacture, sell and export six brand new vehicles in India out of which four will be SUVs and two ‘A segment EVs.
13 Feb 2023 | 15391 Views | By Ketan Thakkar
Ashwani Gupta, COO of Nissan Motor Corporation announced that the Renault Nissan alliance is writing the next chapter of its alliance in India, after the global alliance restructuring announced by the company in London in the first week of February.
The Renault Nissan alliance is going to develop, manufacture, ...
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Ashwani Gupta, COO of Nissan Motor Corporation announced that the Renault Nissan alliance is writing the next chapter of its alliance in India, after the global alliance restructuring announced by the company in London in the first week of February.
The Renault Nissan alliance is going to develop, manufacture, sell and export six brand new vehicles in India, of which four will be SUVs and two ‘A segment EVs.
To execute this, the alliance will invest $600 million or Rs 5,300 crore in the country and generate employment for more than 2,000 people. The plan is to also make the Orgadam manufacturing facility on the outskirts of Chennai completely based on renewable energy by 2045.
After signing the MoU on Feb 13, Gupta addressed media persons (where Autocar Professional was also present) and spoke about future plans and the importance of this investment. “This investment is very significant not only for products but for technologies like EV to really capture the growing Indian market which is the third largest market in the world. The alliance wants to use India as a base for export.”
Excerpts:
Could you share details on your future plans?
First of all, it will be a shared investment, second, we have graduated from cross badging. We don’t start with a product anymore, we start with the customer and as you would have seen, we have a very clear brand distinctiveness, you will not call it a cross badge.
You would have seen the latest Micra EV, which we announced in Europe, though it is based on Renault 5, you will see it is quite distinctive, so all the six cars which we are talking about three will be Nissan, three will be Renault and they will all be distinctive, in all our shared cars like Magnite, Aria etc.
Will Nissan’s products overlap with Renaults’?
The segment will overlap, but there is a great potential for both brands to grow.
‘A’ segment is growing more than 40 percent, ‘C’ segment is growing more than 40 percent, I think we have enough space based on our product competitiveness to share this space and come together, and demonstrate competitiveness in the marketplace.
The key point for us is to be competitive in the market.
What about A segment EVs?
This will be a completely new EV. This product will have our experience of the last 13 years of Leaf around the world. You would have seen Nissan Aria and Nissan Sakura have been great success around the world, especially with Sakura in Japan, which represents — 40 percent of the market. It has been triple crowned as Kei car of the year, and also EV of the year. So all of our experience in design, development and manufacturing and selling of battery electric cars of 13 years, Nissan will be capitalising its experience and putting it in the A segment cars.
What are your plans for localising batteries?
With the battery manufacturing, the biggest opportunity or challenge is the vertical integration, which is what we are working on right now with the state and central government to make sure that we are capitalising on all the government schemes to make sure our battery electric cars are localised and competitive. The more details we will share in the future.
We have signed the MoU today, we have already made some investment in product study etc, first sop will be 2025. Starting 2023, within three to five years, these investments will be made. But these investments are for products, if we decide to do more on EVs, we will do more investments, so this investment is just the start, to define mainly the product investment and modernisation of existing plants to do these six products.
Maybe if the market is growing as it is growing today, if the products are accepted today the same as Nissan Magnite, we may think of increasing it. We may start with very cautious investment in India.
Is the investment shared and till what time frame?
We are keeping Indian operations autonomous. RNAIPL (Renault Nissan Alliance India) will remain RNAIPL, RNTBCI (Renault Nissan Technology Business Centre India) will remain RNTBCI. The R&D centre in India will support Renault Nissan's global R&D efforts — but the thing which we are changing in line with the global capital restructuring — in India also, we will be redefining the capital structure between Renault Nissan.
Renault Nissan Alliance is today 70 percent Nissan, 30 percent Renault, now it will be 51 percent Nissan and 49 percent Renault. On the other side, 30 percent Nissan, 70 percent Renault will be 51 percent Renault and 49 percent Nissan. This equal partnership will help us in unleashing all the potential in the future.
We have already started the investment, started working on the products, the first product will be out in 2025 and within a few years of launching the products, the investment will be finalised (consummated). Then we will prepare for the next phase of investment. This investment will be for the first six cars and some money will go into the modernisation of our plant. Our current utilisation is about 49 percent, we want to take up the utilisation to 80 percent used for both domestic and exports.
Will the investment go into expansion?
The main investment will be for product, Chennai plant already has significant capacity, about 49 percent is getting utilised today, with these products, we see the utilization of 80 percent - catering to both local and exports needs.
Having said that, when we talk of electrification, this plant will need some investment in modernization, with new technologies, that is not included in this $600 million investment.
It is mainly for the product, in the near future, we have no plans to expand the capacity, our target is to use the capacity which we have installed using local as well exports volumes.
How will you manage till 2025, will your brands need a rejuvenation?
Yes, you are right. We have gone through different product and brand lifecycles in India in the last 13 years. So that is needed, our brand is more driven by customer experience and not common architecture alone. This is what we have demonstrated with Magnite.
Even with one product which is covering just 15 percent of the market, we have about 1-1.5 percent market share. This has only happened, because we have developed our brand step by step, with the three new products — we will take it to the next level.
We are thankful to dealer bodies and customers who have trusted Nissan with just one model. That gave us the confidence to invest. These six models (along with Renault) will be localised in India, so we need to time to do that, of course we have to go through the transition, in addition as we said before, to keep that momentum, we are considering some of the CBUs in India, so that we keep the Nissan brand moving forward.
Magnite covers 15 percent of the segment, with A and C segment vehicles in the future, Nissan will cover 40 percent of the Indian automotive market.
Is Hybrid part of your future plans?
Nissan's global electrification strategy is driven by each individual region's needs. Each region's needs are driven by customer, infrastructure and magnitude of government support. When you look at Europe, all three exist, that is why today, 20 percent of the market is BEV, but the evolution in Europe started in 2010, already 13 years to transit to this level of electrification.
When it comes to Japan, Nissan was the only automaker to do battery electric and that is where hybrids are dominating now, but there is a shift towards EVs.
In China, things are moving towards battery electric.
As you can see, there is always dispersion in the product mix and technology mix in each market. When we look at India, of course, the internal combustion engine is the main (powertrain) today, with 0.5 percent of battery electric vehicles, but the government policies are supporting BEV, and if we have more BEV products in India, the market will grow.
I do believe that Battery Electric Vehicle will be a key strategic Pillar for India electrification growth and not the hybrid.
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Renault Nissan Alliance to invest Rs 5,300 crore in India, plans six new models including 2 EVs