New Delhi: Forget China, its focus India for global automakers, courtesy small cars. In a move that reflects the growing stature of the Indian car industry globally, Japanese major Nissan has decided to shift the entire production of its small car Micra from the UK to India. After production of the Micra begins here, Nissan plans to manufacture four more models in India, involving a total investment of over Rs 2,000 crore.
The move underlines the rush among automakers to rationalise production costs and move to locations that offer the best value and quality. “We have decided to manufacture the Micra at our upcoming factory at Oragadam, near Chennai,” Nissan India MD and CEO Kiminobu Tokuyama told TOI.
The company’s Chennai plant will start production from May next year, and export markets would be catered to from autumn, Tokuyama said. Nissan, he said, plans to meet Micra’s requirements for the entire European region as well as some other markets like West Asia from the Chennai plant. “We plan to start with export volumes of 1.1 lakh units, which would be gradually scaled up to 1.8 lakh units as demand goes up,” Tokuyama said.
But what prompted the step? “There are many benefits in India, including a high-quality vendor base that is also cost-effective, leading to globally-competitive pricing,” Tokuyama said. Nissan will thus emulate companies like Hyundai and Maruti Suzuki, which make small cars in India to export to Europe. Nissan aims for 6% mkt share in 3 yrs
New Delhi: Nissan’s move points to the growing importance of India in small car manufacturing, which was initiated by the government by way of lower manufacturing tax on them. The rising scale of small car production in India also sweetens the deal in favour of the country as component makers have improved on quality and scale, making them a safe and a reliable bet. Lower wages in the market, and relatively high engineering skills, is another big advantage that attracts companies.
Korean carmaker Hyundai was perhaps the first company to have realised the benefits as it shifted production of its entire small car portfolio to India. Maruti Suzuki is the other carmaker to be focusing on this, and has started the manufacture of export-intensive model like A-Star exclusively in India that is also retailed across Europe.
“India will be a very important market for us in the coming years and emerge as a strategic production hub for Nissan globally,” Tokuyama aid. Nissan, that currently has negligible presence in terms of volumes as it retails only two imported models, expects to have a market share of around 6% over the next 3 years by when it plans to manufacture five models locally and import four others.
Scource: TOI
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