French auto major Renault has temporarily put on hold its plans to launch cars in India by 2010 in the wake of the global slowdown as the company has decided to hold back on investments on assembly line at its Chennai plant.
The company, which had last year announced a Rs 4,500-crore investment over a period of seven years to produce four lakh cars annually in an alliance with its Japanese group company Nissan, has now stopped hiring for production activities and is awaiting for market conditions to improve.
“Renault’s investment on production plant in Chennai is being temporarily frozen and what we will miss out is Renault cars coming out in the Indian market by 2010,” a senior Renault India official said.
The company had originally planned to roll out cars based on four platforms from the Chennai plant, in which it will have a production capacity of 2 lakh and the rest with Nissan.
Asked how much investments have been held back, he declined to give a specific number but said: “Already, Rs 900 crore has been invested on the plant by Renault and Nissan together. The freezing is only on the production line of Renault but other infrastructure development of the plant is continuing.”
The official said the company will be reviewing the market situation on a quarterly basis to assess its plans for India.
Already, Nissan has announced that it is scaling back its investments at the Chennai plant and will be starting production only through a single assembly line as against two lines planned earlier.
Currently, Renault has 45 employees at its Mumbai office and 50 at the Nasik unit, while a combined of 190 staff have been hired jointly by it and Nissan at the Chennai plant.
The official said even as the investments have been scaled down temporarily, Renault and its partner Mahindra & Mahindra are likely to launch a new car on the platform of sedan Logan next year.
