Nissan – Renault to increase its production at Chennai plant

India: Japan based Nissan and its French partner Renault has planned to increase its production at Chennai plant based in India, which is operating as a joint venture between the two multinationals. The company, Renault Nissan Automotive India Private Ltd (RNAIPL) is likely to hike the production capacity of the facility by introducing a third working shift.

The Renault Nissan plant at Oragadam, Chennai, produce vehicles to meet the domestic demand as well as to export in international markets. The production enhancement was planned due to the rapid surge in the demand of Kwid and new Datsun model, in the Indian as well as global market.

The plant would introduce a new shift in night, in one of its two production lines, which is going to increase its overall annual production capacity. The facility which rolled out its one millionth vehicle in January, 2016, is currently India’s second largest car exporter with approximately 600,000 units being exported across 106 countries.

The Alliance which started operating in March 2010 with an initial investment of approximately USD750 million, have a current production capacity of 0.48 million units per year and have launched in total, 12 new models of Nissan, Renault and Datsun till now. The manufacturing facility and R&D department of the joint company, account for around 12,000 direct jobs in Tamil Nadu and 40,000 in the Indian supply chain.

Colin MacDonald, CEO and MD of RNAIPL said “This escalation in the production capacity will enable the company to meet the Indian and overseas demand by trimming down the waiting time in deliveries”.

According to a recent report published by TechSci Research, “India Tyre Market Forecast and Opportunities, 2020”, India is the seventh largest vehicle producer in the world, with an average annual production of more than 20 million vehicles in 2015. The country’s tire market is predominantly a replacement driven market owing to large vehicle fleet. Almost all major global automobile manufacturers operate in India. This creates huge opportunity for tire manufacturers in the country.

As per TechSci Research, this upsurge in the production of vehicle by Nissan-Renault Alliance is anticipated to enhance the vehicle export from India and also increase the demand of OEM tire in the country, which would eventually impact the overall OEM tire market of India in coming years.