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Nissan, Renault Investing $5 Bil in India, Plan New “Ultra-Low Cost Cars” for Emerging Markets

Japanese and French makers will jointly develop new models.

by on Jul.16, 2013

The new Datsun Go debuts in India.

A day after launching the revival of the once-familiar Datsun brand, Nissan and its French partner Renault are laying out major plans for India and other emerging markets, including a plan to jointly develop a new line of ultra-low cost vehicles that the makers hope will give them a leg up in some of the world’s newest and fastest-growing markets.

Describing himself as “very bullish on India,” Carlos Ghosn, the CEO of both of the automotive partners, outlined plans to invest $5 billion on the subcontinent over the next few years, double what had previously been announced.

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Ghosn said that Nissan, Renault and the reborn Datsun brand and aiming for a 15% share of the Indian market.  Between them, the partners could have as many as 15 to 20 different models in Indian showrooms within the next five years, they indicated.

That is expected to include products developed under a program designed to target the low end of the vehicle spectrum in India and other emerging markets, a niche now dominated by products like the bare-bones Tata Nano.  The project is based on an all-new small car platform, dubbed CMFA that will be a Nissan and Renault joint effort.

The Common Module Family Architecture will take a “cost-breakthrough” approach, according to Nissan, and will offer a variety of different bodies and powertrains sharing the same basic platform. The first CMF-A product is expected to reach Indian showrooms in 2015, with production slated for a plant in the city of Chennai.

That facility, which Nissan and Renault opened in 2010, is the largest jointly operated by their alliance. The $1 billion facility currently produces models such as the Renault Pulse and Nissan Micra and has a production capacity of 400,000 vehicles a year.  The new investments would boost capacity in India to at least 600,000.

(For more on the revival of the Datsun brand, Click Here.)

But the new Common Module Family project would not be limited to India. The alliance has targeted a number of other emerging markets, including Indonesia, Brazil and Russia, that could offer opportunities for marketing a new, lost-cost vehicle.

“We are breaking new ground with CMF-A to meet and exceed the high standards of consumers in the world’s fastest growing economies – particularly people buying a new car for the first time,” explained Ghosn.

Unlike current, low-priced models, the goal of the Nissan-Renault project is to come up with vehicles that offer a fair amount of content, including modern safety technology, while still generating reasonable returns for the carmakers. Ghosn has previously indicated a target of at least 10% margins for Nissan.

(Renault-Nissan Alliance reports 54% jump in joint “synergies.” To find out more, Click Here.)

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