M&M JV unit to come up near Chennai

The joint venture involving Mahindra & Mahindra (M&M), Renault of France, and Japanese major Nissan for production of passenger cars has decided to set up its plant at Oragadam, 60 km from Chennai. This ends a four-month search for a location.

It is learnt that the state government is likely to sign a memorandum of understanding with the partnering companies this Monday.

Oragadam is emerging as a key manufacturing location like Sriperumbudur, with a large number of big auto-related projects, including the Rs 470-crore Automotive Research Centre and Rs 520-crore Apollo Tyre Plant, located there.

Pawan Goenka, president, M&M, refused to confirm the development. However, a senior official of Nissan India Limited confirmed that the joint facility would be based near a port.

A senior M&M executive said the company will have the majority 50 per cent stake, while Nissan and Renault will each hold 25 per cent. With an annual capacity of 400,000 cars, the new company will invest over Rs 5,000 crore to build the plant.

The first vehicle to roll out will be the no-frill Logan, followed by its variants, which will initially be manufactured at the Nasik facility of M&M and eventually be produced in Chennai.

Later, the facility will also serve as a major manufacturing base for Nissan's small car project for the global market.

Nissan and Renault are tied in a global alliance under which Nissan holds 15 per cent equity in Renault, while the French giant controls a 44 per cent equity stake in Nissan.

While Mahindra & Mahindra had earlier tied up with only Renault, Nissan, which was looking at going it alone, has now decided to join as the third partner.