Carmakers Renault-Nissan, on Monday, announced they will invest Rs 5,300 crore over the next five years to modernise their sprawling manufacturing unit in Oragadam near Chennai to roll out electric four-wheelers and launch six new models for the domestic and export markets.
The first of the six models – two of which will be battery-operated electric vehicles (EVs), will be launched in 2025. Of the six new models, Nissan and Renault will launch three each, including four sports utility vehicles (SUVs) – all will be available in India and exported to key markets across the globe.
The fresh investment of Rs 5,300 crore will generate jobs for another 2,000 people, with the Renault-Nissan alliance already possessing a 15,000-strong workforce in the country. A memorandum of understanding (MoU) between Renault-Nissan and the Tamil Nadu Government was signed between Ashwani Gupta, Nissan’s Director and Chief Operating Officer, and V Vishnu, MD & CEO, Guidance, in the presence of Chief Minister M K Stalin.
Renault-Nissan rolled out the first car from the Oragadam unit in 2010 and has so far exported 2.4 million cars to 108 countries. With the new announcement, the alliance hopes that its plant utilisation will reach 80% when all the six new models are launched. The current plant utilisation is around 50%.
“We are writing a new chapter of the (Renault-Nissan) alliance today. We have had a great experience in the Indian market in the past 15 years and the change point now is we will make localised (Indian) models for the global market. Earlier, we used to make global models for the local market,” Gupta told a media round table after the MoU signing event.
The top executive said the new models will include two new A-segment EVs, one each from Renault and Nissan and four C-segment SUVs, two each from two companies. “We plan to roll out the first model of the six new ones in 2025. That is the target. The cars will be engineered and built at the Chennai plant,” Gupta added.
With the new models, Nissan also hopes to increase its market share from 1.3% as the company believes Indians are moving from classic sedans to SUVs. “India is the fastest growing automotive market in the world with an increase of 27% over the previous year. We have already tasted success with our product Magnite, and we believe we can tap into the SUV market further with the new models,” Gupta added.
He also said the company also plans to tap into the EV market of India which is set to reach 13% by 2030. “We can be competitive in the electric vehicle market only if we vertically integrate the factory to roll out EVs. Some part of the new investment will go into electrifying the factory for making EVs,” Gupta said.
To a question on whether Nissan plans to launch electric light commercial vehicles (LCVs) to tap into the growing markets fuelled by e-commerce, Gupta said the company has no such plans for India in the immediate future.
Complementing the additional production will be an increase in research and development and associated activities at the Renault Nissan Technology and Business Centre India. At the same time, the factory will also become carbon-neutral with a significant increase in renewable energy generation.
S Krishnan, Additional Chief Secretary (Industries), said the Renault-Nissan alliance has been one of the mainstays in ensuring that Tamil Nadu remains the automotive capital of India and an important hub for the manufacture of automobiles and auto components and automobile design as well.
“We also hope the fresh investment by Nissan will encourage several Japanese companies to come to Tamil Nadu to keep up its position as the best investment destination in India,” he said.