India attracts Global automakers
The Indian car market is growing @ avg rate of 20% exceeding that of China's growth rate which is attracting global automakers for a share in the pie. The market is however, very competitive & companies like Renault would like to have their presence. Nissan motor co feels that it will be a mistake for it not to be present in India. Nissan has lagged behind its Japanese competitors in tapping opportunities in India, both as a market and as a manufacturing base.
Indian car sales exceed 11 lakh in the FY 06-07. However, the compact cars accounted for nearly three-quarters of that. This fig is though smaller in comparison to China's figs, yet market is growing much faster.
According to J.D. Power and Associates (Auto forecasting unit) annual vehicle sales will nearly double to 20 lakh in next 5 years & all car makers know the huge growth potential of Indian market.
Indian market needs inexpensive and fuel-efficient cars, strong enough to withstand potholed roads and big enough to fit a family of five or six with comfort of AC.
Leading Japanese automakers, including Toyota Motor Corp., Honda Motor Co. and Suzuki Motor Corp., have significantly expanded their operations in India in recent years.
Nissan made its first move to enter India this year, signing up for a passenger car venture with its partner, Renault SA of France and Indian automaker Mahindra & Mahindra Ltd.
The three are building a large plant near the southern Indian city of Chennai, which Nissan would use to manufacture and export compact cars to Europe.
According to the CEO of Renault, production is expected to begin in 2010., Nissan and Renault are also exploring the viability of much talked about, a Rs 1 lakh car similar to that of TATA.
Renault & Bajaj Auto Ltd. Are discussing about a possible joint venture to manufacture such low cost cars. India has a competitive advantage over China, as the Indian government allows carmakers to establish 100 percent owned local subsidiaries, an option chosen by companies like General Motors Corp., Hyundai Motor Co. and Ford Motor Co. However, in China it is legally necessary to have local partners.
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