Renault sees Indian venture profitable in 2008 http://in.today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2007-04-04T173214Z_01_NOOTR_RTRJONC_0_India-293158-1.xml
Wed Apr 4, 2007
By Rina Chandran
NASHIK, India (Reuters) - Renault Chief Executive Carlos Ghosn said on Wednesday he was optimistic that the French car maker's joint venture with Mahindra and Mahindra would be profitable in 2008.
"Not right away, but we are optimistic that the venture will be profitable in 2008 (calendar year)," Ghosn told reporters in Nashik, 180 km north west of Mumbai.
Renault's Logan sedan, which marks its first foray into the fast-growing Indian market, is being produced at a Mahindra plant in Nashik, which can roll out 12 vehicles per hour.
Ghosn said he estimated the venture could break even with sales of 30,000-32,000 cars.
The Logan is also being made in Iran, Romania, Russia, Morocco and Colombia, but India is the first in which the right-hand drive version is being produced.
The car will also be made in Brazil.
"India is a key market for Renault both in the case of Renault Commitment 2009 -- which has set a target of 800,000 additional new cars sold worldwide by 2009 -- and beyond that," Ghosn said.
"India is going to be a very big market for us beyond 2009."
OTHER SEGMENTS
The planned production capacity of the Logan by 2009 is about 1 million cars. This does not include a new plant planned for Chennai, which will have a capacity to make 400,000 cars for Mahindra, Renault and Nissan in seven years' time.
Renault has not made a decision yet on marketing and selling its products from the Chennai plant, but Mahindra was likely to partner it, Ghosn said. Under the current Mahindra-Renault joint venture, Mahindra will market the co-branded Logan cars.
Ghosn said the French firm plans to enter other segments also. "We have an intention to enter non-Logan segments but we don't have a firm strategy yet."
Asked if Renault would always partner Mahindra in India, Ghosn said: "We do not say 'always' or 'never' in the automotive industry. We knock on wood and we pray.
"But we get along very well with Mahindra and for the foreseeable future we will partner Mahindra."
Ghosn said the French firm could also partner Mahindra in other low-cost operations.
"It's possible we could work with Mahindra on a low-cost car. We will always talk to Mahindra on options."
Ghosn said sourcing components from India would be significant, as costs are about 30 percent lower than in Europe or Japan.
Ghosn reiterated Renault has not made a decision yet on using Nissan's plants in Pakistan and Indonesia, and that it was "very probable" it would use the Nissan plant in South Africa.
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