Nissan is all set to make its foray in the small car segment in India. The Nissan, Renault, Bajaj tripartite alliance plans to launch the compact car from their Chennai facility. Called the “A” platform car, Nissan calls it a strategic matter as this involves addressing a certain price band, bringing value to customers along with a high level of affordability and delivering mobility to a large number of people. In this interview, Nissan EVP, Carlos Tavares, speaks about this latest compact car venture and his India-centric future plans.
NDTV : Now since you have stepped into the Indian market, you have got your alliance partners and your strategies for that in place. Also the plant in Chennai has been announced where work has already begun, so what’s now the strategy ahead?
Carlos Tavares : Our strategy in India was to step in with Indian partners and up to now we are very consistent. We have taken the time to select the right Indian partners and I believe it was a good investment for the efficiency of our corporation in the future. It is always good to spend a little more time in the beginning to make sure that everybody understands the same thing, everybody shares the same goal and business interests are aligned in the same direction so that the implementation phase is very smooth and efficient. Now our Chennai plant has been handed over for overseas operations. We have finalized the last details with our partners and very soon we will announce where we will built our specific manufacturing facilities to produce our HCVs in India. Thus we are converging very nicely with Renault Bajaj.
NDTV : Tell us the way in which the capacity is going to work in the Chennai plant. How is it going to be divided between Renault and Nissan? And also the capacity that you will use will that be both for export and domestic purposes?
Carlos Tavares : Yes we would like to take that opportunity because in India there is a strong potential in terms of supply. We believe we can perfectly achieve high levels of quality and cost efficiency which opens the door for export opportunities. The Chennai manufacturing site is based on three major legal entities. One of them is a 50-50 JV between Renault and Nissan. From the Nissan perspective we will primarily support the growth in India but we have enough capacity to export and also take the best out of our supply base.
NDTV : Since you and Renault will be in the same plant, though different lines, will there be some kind of product sharing with Renault?
Carlos Tavares : From the go, both companies share the manufacturing best practices and guidelines which gives us the possibility to use any of our cars in the line of any of the partners. So for us the capability to cross manufacturing products is already being implemented since the last four or five years. We decided to create a new platform called “A” platform for entry cars and the reason we did this because we learnt a lot of things regarding cost efficiency from Renault’s Logan success and we decided to implement them in the A platform. This platform will start in India from the Chennai base.
NDTV : What are other products you will be launching from Chennai’s Nissan stable? Can we expect some platform sharing agreement between you and Renault?
Carlos Tavares : Of course we will extend our line up in India to meet the Indian customer needs. We will start with the entry level cars from Chennai base because in terms of the investments we made, volumes are important.
NDTV : What is the time frame? When can we expect to see these things kick in and will there be the same product coming out from both the stables, branded separately, but on the same platform?
Carlos Tavares : Of course we are always in a situation when any platform from the alliance can be used by any partner. So we are open to any kind of platform sharing with Renault as long as it is beneficial for us. We will need somewhere around two to five years to ramp up in India and be significant player in the compact car segment in Indian market. Once we achieve that perhaps we will go a step further for enlargement of our line-up. We have already announced that may be by 2012 we will have a portfolio of at least 8 cars in India.
NDTV : So will that include only CBUs or all vehicles manufactured and rolled out of Chennai?
Carlos Tavares : Most of that will be CBUs but in terms of diversity they will be Indian made.
Mahindra was supposed to be a part of the manufacturing in Chennai but is not a part of it anymore. What went wrong? Also Suzuki, the car would be manufactured in India. Will that be for Indian markets or solely for Europe?
Carlos Tavares : This car is going to be used in Europe. The decision made by M&M was due to change in priorities and the fact that there was the opportunity to have a better manufacturing strategy compatible with the product strategy of M&M. So at one point of time it decided to shift its strategy and we respect that. Though from the Nissan’s perspective we regret this decision because we feel the quality of discussion was good.
NDTV : Bajaj and Renault had already started on discussions for the small car project and you entered later. What made you do so?
Carlos Tavares : Yes Renault started to discuss with Bajaj first but very quickly we were on board too. We considered low cost cars as a strategic matter as this involves addressing a certain price band, bringing value to customers with a high level of affordability and delivering mobility to a large number of people. So discussions were started on a three party basis very quickly and it has reached a certain level of maturity.
NDTV : Tell me about the branding. Will it be under the brand Renault, Bajaj or Nissan?
Carlos Tavares : All options are open. The discussions are still underway.
NDTV : And by when will we be able to see this car actually?
Carlos Tavares : We will make an announcement very soon.
NDTV : Now since you have stepped into the Indian market, you have got your alliance partners and your strategies for that in place. Also the plant in Chennai has been announced where work has already begun, so what’s now the strategy ahead?
Carlos Tavares : Our strategy in India was to step in with Indian partners and up to now we are very consistent. We have taken the time to select the right Indian partners and I believe it was a good investment for the efficiency of our corporation in the future. It is always good to spend a little more time in the beginning to make sure that everybody understands the same thing, everybody shares the same goal and business interests are aligned in the same direction so that the implementation phase is very smooth and efficient. Now our Chennai plant has been handed over for overseas operations. We have finalized the last details with our partners and very soon we will announce where we will built our specific manufacturing facilities to produce our HCVs in India. Thus we are converging very nicely with Renault Bajaj.
NDTV : Tell us the way in which the capacity is going to work in the Chennai plant. How is it going to be divided between Renault and Nissan? And also the capacity that you will use will that be both for export and domestic purposes?
Carlos Tavares : Yes we would like to take that opportunity because in India there is a strong potential in terms of supply. We believe we can perfectly achieve high levels of quality and cost efficiency which opens the door for export opportunities. The Chennai manufacturing site is based on three major legal entities. One of them is a 50-50 JV between Renault and Nissan. From the Nissan perspective we will primarily support the growth in India but we have enough capacity to export and also take the best out of our supply base.
NDTV : Since you and Renault will be in the same plant, though different lines, will there be some kind of product sharing with Renault?
Carlos Tavares : From the go, both companies share the manufacturing best practices and guidelines which gives us the possibility to use any of our cars in the line of any of the partners. So for us the capability to cross manufacturing products is already being implemented since the last four or five years. We decided to create a new platform called “A” platform for entry cars and the reason we did this because we learnt a lot of things regarding cost efficiency from Renault’s Logan success and we decided to implement them in the A platform. This platform will start in India from the Chennai base.
NDTV : What are other products you will be launching from Chennai’s Nissan stable? Can we expect some platform sharing agreement between you and Renault?
Carlos Tavares : Of course we will extend our line up in India to meet the Indian customer needs. We will start with the entry level cars from Chennai base because in terms of the investments we made, volumes are important.
NDTV : What is the time frame? When can we expect to see these things kick in and will there be the same product coming out from both the stables, branded separately, but on the same platform?
Carlos Tavares : Of course we are always in a situation when any platform from the alliance can be used by any partner. So we are open to any kind of platform sharing with Renault as long as it is beneficial for us. We will need somewhere around two to five years to ramp up in India and be significant player in the compact car segment in Indian market. Once we achieve that perhaps we will go a step further for enlargement of our line-up. We have already announced that may be by 2012 we will have a portfolio of at least 8 cars in India.
NDTV : So will that include only CBUs or all vehicles manufactured and rolled out of Chennai?
Carlos Tavares : Most of that will be CBUs but in terms of diversity they will be Indian made.
Mahindra was supposed to be a part of the manufacturing in Chennai but is not a part of it anymore. What went wrong? Also Suzuki, the car would be manufactured in India. Will that be for Indian markets or solely for Europe?
Carlos Tavares : This car is going to be used in Europe. The decision made by M&M was due to change in priorities and the fact that there was the opportunity to have a better manufacturing strategy compatible with the product strategy of M&M. So at one point of time it decided to shift its strategy and we respect that. Though from the Nissan’s perspective we regret this decision because we feel the quality of discussion was good.
NDTV : Bajaj and Renault had already started on discussions for the small car project and you entered later. What made you do so?
Carlos Tavares : Yes Renault started to discuss with Bajaj first but very quickly we were on board too. We considered low cost cars as a strategic matter as this involves addressing a certain price band, bringing value to customers with a high level of affordability and delivering mobility to a large number of people. So discussions were started on a three party basis very quickly and it has reached a certain level of maturity.
NDTV : Tell me about the branding. Will it be under the brand Renault, Bajaj or Nissan?
Carlos Tavares : All options are open. The discussions are still underway.
NDTV : And by when will we be able to see this car actually?
Carlos Tavares : We will make an announcement very soon.