Automobile News Live

TATA motor's Magic & Winger

2007-06-19T03:42:00.000-07:00

Tata Motors today announced the launch of a new product range - the Magic and the Winger – in yet another major initiative to change the way people in India travel. The Magic, developed on the platform of the stupendously successful Ace, now brings to urban and rural areas a comfortable, safe, four-wheeler public transportation mode. The Winger range, India’s only maxi-van, offers a perfect blend of the comfort of a car with the spaciousness of a bus for intra-city and long-distance transportation needs. Both the Magic and the Winger are being launched nation-wide, starting with Maharashtra and Gujarat, and will be extended to other parts of the country in due course.

The two vehicles will create new segments, and in a complementary manner help cover the entire spectrum of customer needs in mass transportation from the very rural interiors to cities as well as the top-end luxury mass transportation segment.Commenting on the launches, the Executive Director of Tata Motors Commercial Vehicle Business Unit, Mr. P.M. Telang, said, “Tata Motors has always been at the forefront with its commitment to offer transportation solutions which will change the way India travels. The Magic and the Winger are our latest initiatives in that direction, and more will follow. They combine Tata Motors’ traditional engineering excellence with strong customer orientation. We are very hopeful that, in their respective spaces, they will deliver the same success as we have had with our market leading range of commercial and passenger vehicles.”

Magic With an ergonomically designed all-steel cabin, Magic has a flexible seating capacity of 4 to 7 passengers, in pleasant and spacious interiors including comfortable seats and ample legroom for an enjoyable ride for the passengers.Powered by a 16 HP 700 cc water-cooled diesel engine, it will provide the Magic owner with high fuel efficiency and very low maintenance. The 12” tyres provide higher ground clearance, and the rigid front axle can weather tough road conditions. The turning radius of 4.3 metres is agile enough to navigate narrow bylanes and dense traffic. For the driver’s benefit, the Magic has a clearly visible instrument cluster, utility tray and a digital clock in the dashboard and also a radio fitment provision. The Magic meets BS-III emission norms and has been developed for use in any market -- be it urban, semi-urban or rural. It is backed by a 36000 km/12-month warranty. The Magic range is at Rs.2.60 lakhs (ex-showroom Pune).

Winger seats 9 to13 passengers, with generous saloon space, spacious head and legroom and wide luggage space. Passenger comfort has been further enhanced with all front-facing seats, each with magazine pockets, bottle holders, spot lamps and grab handles, besides a music system. The fully enclosed body, uniquely placed fuel tank, seat belt for every seat, child lock, fog lamps and a demister (compartment ventilation fan) provide complete safety. The robust and rugged suspension ensures both ride comfort and load carrying capacity, while the monocoque design minimises NVH.

The Winger is powered by a 2-litre turbo charged diesel engine.The Winger’s versatility allows it to be deployed for both long-distance transportation across different terrains in all weathers and also intra-city needs and adaptation for staff vehicles, hotel and airport transfers, tourist usage, ambulance, and school van among others. The Winger has 11 variants, in three levels of comfort -- standard, deluxe and luxury -- meeting BS-III emission norms and backed with a 1.5 lakh km/18-month warranty. The Winger range starts at Rs.4.70 lakhs (ex-showroom Pune).

Sundaram-Clayton recast cleared

2007-05-15T07:45:00.000-07:00

5-year-old business recast plan for Sundaram Clayton (SCL) has been finalised by TVS group and the US partner, Wabco, part of American Standard (AS). The board of SCL on Monday cleared the transfer of the brakes business to its wholly-owned subsidiary, Wabco-TVS (India), with assets and liabilities as on January 1, 2007. SCL will remain a separate entity by retaining the non-brakes businesses like aluminium die castings and holding investments directly and through its subsidiaries in TVS Motor, TVS Electronics and TVS Finance.

Currently, in the Rs 18.96-crore paid-up capital, TVS holds 40.83%, Clayton Dewandre Holdings (CDH), UK, a part of Wabco division of AS, 39.17% and the public 20%. The equity will be split equally between Wabco-TVS and SCL. As part of this, it is proposed for every existing share of Rs 10 paid-up currently held in SCL, shareholders will receive one share of Rs 5 paid-up of SCL and one share of Rs 5 paid-up of Wabco-TVS. Since all the shareholders of SCL will be issued shares in Wabco-TVS on a proportionate basis, there will be no change in the overall shareholding pattern on the date the demerger becomes effective. Post demerger, shares of Wabco-TVS will be listed on the same exchanges where the shares of SCL are listed. It is intended that within two years from the date of listing of the shares of Wabco-TVS, TVS group will retain majority control and management of SCL. Similarly, the majority control and management of Wabco-TVS will be vested with Wabco during the period. In line with this objective, CDH will transfer the shares held by in SCL to TVS group and the latter will share its shares in Wabco-TVS to CDH. Listing of the new entity is expected to take place in April 2008 after securing all approvals.

In a statement, SCL said both partners have decided to focus on their respective core competencies to more effectively capture future growth opportunities. The brakes business requires new technology to maintain its market leadership and respond to the future needs of the Indian commercial vehicle markets for enhanced braking and advanced safety and performance systems.This is primarily driven by a significant increase in road and highway infrastructure and expected regulations for improved safety and environmental compliance. This will enable Wabco to provide access to technology as well as leadership to pursue growth opportunities in the overseas markets for the brakes business. Sources in SCL, in a couple of years, brakes export is expected to touch Rs 100 crore.On the other, the foundry business requires focused attention to enhance operations and further develop export markets, which will be pursued by the TVS group.

Hyundai HR head drove his own way

2007-05-10T04:46:00.000-07:00

Mr G S Ramesh, senior vice-president, HR, Hyundai Motor India (HMIL), has stepped down from his official responsibilities in the company with effect from May 09, 2007, due to personal reasons, thereby ending his 11 year association with the car manufacturer.

A statement issued by HMIL acknowledged Mr Ramesh’s immense contribution from its very inception till date. His stepping down will be an irreparable loss to the company, it said. When contacted, Mr Ramesh told ET that he decided to step down to pursue some of his personal ambitions, which includes getting a doctorate. He is likely to take up advisory roles with large corporates. Mr Ramesh was one of the first few employees of the company when it was incorporated in 1995-96. HMIL now employs close to 9,000 employees—both direct and indirect.

Tata's Rs 1 lakh Car may bet bikes

2007-03-23T05:44:00.000-07:00

The much-touted "people's car" from the stable of Tata Motors could create a major dent in the top-end motorcycle sales with its lucrative price tag, which has become a global case study, global consultancy firm J D Power today said. If Tata's are able to get quality and customer satisfaction parameters right, the 'People's Car' could shift buyer from a top-end two-wheeler on account of its safety and convenience factors, it said.

"The two-wheeler market in India could see a dent at the top-end because of the Rs one lakh car, but how far reaching will it be, will depend on the product's performance, after sales service and overall customer satisfaction," JD Power Director India Mohit Arora said. The progress of the car is being monitored by automobile industries across the world for possible replication in different markets. "Rs one lakh car is a case study which the whole world is watching. If successful, the car can spark demand in a new segment. Brazil and China are looking for similar products," J D Power Asia Pacific Managing Director Gerrit Kuyntjes said.

The firm, however, cautioned that Tata's would need to get its product right at the first shot as the dynamics of Indian automobile market have changed over the years. "Unlike Indica, in which Tata Motor's got a second chance, it is doubtful if it would get a similar one with the Rs one lakh car as consumers have become more discerning and demanding," Arora added. Even the rural customers, one of the main targets of the car are becoming demanding and less forgiving, he said. Commenting on the Indian passenger car market, Arora said: "The car market would see exciting times ahead with sales volume expected to cross the 1.8 million units mark by 2010."

He said the industry would need to focus on car as a high-value product and needs to retain customers with significant amount of re-purchases coming in. Considering the growth of the Indian economy, the growth of the Indian automobile industry would be high and companies which are able to tap the rural market would benefit the most, he said. J D Power, which plans to start its syndicate services in the Indian two-wheeler market predicted a phase of consolidation of market share as homegrown companies slug it out with foreign competitors. Predicting a good future for the two-wheeler industry, Arora said, the market would continue to grow as its reach expands into the rural areas. "Even for the two-wheelers, quality would be paramount as they report three times more problems compared to a four-wheeler," he added.

Honda unveils Unicorn variant

2007-03-23T05:38:00.000-07:00

Honda Motorcycle and Scooter India (HMSI) on Monday said it was conducting a feasibility study for a new plant to cater to the increased demand. The company also indicated that it was working on a fuel injection powered bike, a 100cc bike and a new scooter.

"A new plant will only come up once our existing capacity of 1.2 million units is fully utilised, which can take another couple of years,'' HMSI CEO and President Yukihiro Aoshima told media persons here at the launch function of an upgraded variant of its 150 cc bike Unicorn.
The new variant will be priced at Rs. 58,150 (ex-showroom Delhi) and will be formally rolled out for sales in the first week of April.

HMSI will also introduce a limited edition Unicorn, priced at Rs. 59,425 (ex-showroom Delhi).
The company has also plans to introduce a new scooter and a facelift version of its sub-150cc bike, Honda Shine, next fiscal.

TVS launches sport variant of 'Star City'

2007-03-13T05:16:00.000-07:00

Two-wheeler major, TVS Motor Company (TVS-M) has launched a sport variant of its popular entry level motorcycle, 'Star City'. Launched in two versions, the basic and premium, the 100 cc 'Star Sport' is expected to strengthen TVS-M's market share in the entry level segment. Further, the year 2007-08 will be an year of new launches and new initiatives for the company. Besides a slew of new launches, TVS-M's two new plants at Himachal Pradesh and Indonesia are also set to go on stream next fiscal.

"We have come out with 'Star Sport' to cater to that segment of customers, who were looking for more style in Star. While the Star variants at present have a market share of 10%, among all categories put together, we expect this to increase to 13%, with the launch of 'Star Sport," Mr K N Radhakrishnan, president, TVS-M told a press conference here on Monday. Within the 'entry-level' segment, the Star variants command a 26% market share. "We hope to get market leadership in the entry level segment, with the launch of 'Star Sport' and we expect the market share to increase to 35%, from the present 26%," Mr Radhakrishnan said. He agreed that the launch of yet another variant of Star, may result in eating into the sales of some of the other models from the company.

"There could be cannibalisation to the tune of around 10%. But, then the move launch a more stylish Star is for a set of customers, who were keen to buy a Star if it offered more style, alongwith its existing qualities," he said. While the basic variant of 'Star Sport' has been priced at Rs 33,990 (ex-showroom Chennai), the premium variant of the new model will carry a price tag of Rs 35,490 (ex-showroom Chennai). Nearly 75% of TVS-M's motorcycle sales comes from the Star variants, with another 15% - 20% coming from Apache and the Victor series contributing the rest.

According to him, the financial year 2007-08 will be an year for new launches and new initiatives. "Our plant in Himachal Pradesh will go operational in April this year, even while the company's first overseas plant in Indonesia, is expected to do the same in May. We will also be launching a new Apache, a three-wheeler in August, and a new Victor during 2007-08," Mr Radhakrishnan said. The move to launch a new Victor, re-inforces the fact that the company needs an aggressive model in the segment to influence market share. "Nearly 50% of all the two-wheelers sold are from the executive segment, where we have just about 5%-7% share. The new product will help us increase our numbers significantly in this segment," he said.

Two wheeler will become Costlier !

2007-03-13T05:04:00.000-07:00

First it was the car makers who were groaning over the education cess. Now, the bike-makers are preparing to spike up their price tags to keep up with the increase in steel prices. Starting April 1, two-wheelers from Bajaj and Hero Honda stable are likely to cost an extra Rs 1,000. Though both companies refused to confirm the impending price hike, dealers say the companies have indicated an increase in prices of its products from next month. Steel prices have increased by about Rs 500 per tonne post-budget.

Market leader Hero Honda is currently running a discount scheme of Rs 1,001 on its models which include Glamour, Splendour and Passion plus. According to sources the company is likely to withdraw the discount scheme in three-four weeks. When contacted, Hero Honda spokesperson denied any plans to hike prices on its models. Bajaj officials were not available for comment. Chennai-based TVS, however, has ruled any immediate correction in the prices of its bikes.

TVS Motor VP marketing Prasad Narsimhan said, “We have no plans to increase prices on our bikes for any reasons in the near future.” Meanwhile, Bajaj has discontinued the 0% interest rate scheme on its 100 cc bike Platina and replaced it with a Rs 2,000 discount. The discount is unlikely to trigger a price war in the entry-level bike segment but it is expected to help Bajaj exit the 100 cc segment. Sources say that Bajaj is looking to exit the 100 cc segment, as per its long-standing plan, by the end of Q1 FY 08.

Sources also say that Bajaj is likely to reduce prices of its 100 cc bikes further in the months to come to clear stock before launching its new platform in the second quarter of FY 08. The company is currently working towards launching higher-powered bikes that will target the 100 cc consumer segment with a better value for money proposition.

Caparo plans Rs 700 cr investment in Tamil Nadu

2007-03-13T04:58:00.000-07:00

UK-based Caparo Group's arm, Caparo Vehicle Products India Private Limited on Thursday signed an MoU with the Tamil Nadu Government for setting up a Rs 300 crore state-of-the-art manufacturing facility at Oragadam.

Caparo India, part of the Caparo Group owned by Lord Swraj Paul, is keen on entering the aerospace sector in a big way, a top company official said here on Thursday. "We are focussing on the automotive sector, trying to attract aerospace customers by exporting to them. Our ultimate goal is to bring aeroplane manufacturers to India," Angad Paul, CEO, Caparo Group and son of Lord Swraj Paul told reporters here.

He was speaking after signing an MoU with the Tamil Nadu government for setting up a state-of-art manufacturing unit in Oragadam, 30 km from here, at a cost of Rs 300 crore. "We want to use our knowledge base for both automobile and aerospace sectors, using our own technology," Paul said. The company is investing Rs 300 crore in the first phase for manufacturing tubular parts for automotive and aerospace, automotive braking systems, fasteners and composite materials and testing at the Oragadam unit, Paul said.

This is Caparo's second project in Tamil Nadu, the first being an auto components plant at Sriperumbudur at a cost of Rs 400 crore, which will commence production next month. The company turnover is 50:50 on both sectors, he said. Though the aerospace segment contributed small numbers in production, its high value contributed towards the turnover to the extent of 50 per cent. The Group wants to concentrate more on aerospace, he said. Caparo has invested Rs 700 crore in the state so far and further investments may be added.

Tata Vs Bajaj : War on words

2007-03-10T00:27:00.000-08:00

There's no doubt Ratan Tata had only good intentions when he said he conceived the Rs one lakh car as he cared for the safety of those using two-wheelers. But Bajaj Auto Chairman Rahul Bajaj thinks its just a ploy to market the vehicle. "He has to sell his car... so he has to speak like that," Bajaj shot back when reporters asked him about Tata Group Chairman Ratan Tata's remark that one of the major reasons for him to decide on the 'people's car' was the concern for safety of those travelling by two-wheelers.

Two-wheelers are sold all over the world, it has been proven that they are safe, he said, adding his company's products were safe. Bajaj also denied that the advent of Rs one lakh car would affect the two-wheeler manufacturers. "Ultimately it is the customers who will decide what they want," he said. Tata had said that the Rs one lakh car would mark a paradigm shift in the way India travels and will draw customers from the two-wheeler segment as well as from the lower end of the four wheeler segment.

The small car to be powered by a 600 cc engine, which could have air conditioning option and seat four to five people, is widely considered to be a threat to the two-wheeler segment. Tata Motors is in the process of building a plant in Singur in West Bengal for the people's car, which it hopes to roll out by next year. The price differentials between the small car and the high end motorcycles likes of Bajaj Pulsar 200 cc, the to-be-launched Pulsar 220 cc and Hero Honda Karizma are expected to be minimal.

Source:Economic Times

Mahindra's won the Punjab Tractors bid

2007-03-09T05:21:00.000-08:00

Mahindra & Mahindra (M&M) has valued Punjab Tractors (PTL) at around Rs 22 billion and agreed to pay Rs 360 per share for a 43.5% stake, reports Economic Times. M&M will shell out a little over Rs 9,510 million in an all-cash deal.

While Actis will gross Rs 6,340 million from the sale of its 29% in Punjab Tractors, the Burman family-promoters of Dabur India-will get around Rs 3,170 million for their 14.5% stake. The final round of bidding came down to M&M, Ashok Leyland and the Chennai-based Tafe, after the Tata group backed out.

Initially, Ashok Leyland was known to have offered Rs 320 per share of PTL, while Tafe and M&M made offers in the range of Rs 330-335 per share. M&M also offered a part-cash part-stock option but finally bagged the deal when it upped its all-cash offer to Rs 360 per share. The company will have to make an open offer to buy an additional 20% in PTL, as per SEBI regulations.

Tough fight for Punjab Tractors

2007-03-06T05:38:00.000-08:00

Ashok Leyland, M&M, Tata group (in concert with Fiat-CNH) and Tafe have emerged as the final four in the race for buying a 43.5% stake in Punjab Tractors. The final bids came in on Monday and merchant banking sources say the bids range from Rs 350 to Rs 450 a share. Private equity firm Actis, which owns 29% stake, and the Burman family (14.5%) are expected to take a final call soon.

The final bids have seen the list of PTL suitors coming down significantly as several players who had earlier shown interest have now dropped out. That list includes Sonalika (International Tractors), Escorts, a private equity consortium that was backing PTL’s former boss Yash Mahajan, and Italian farm equipment company Same Duetz-Fahr. Sources say the successful bid will be decided not only on the basis of price, but also whether the offer was unconditional and the speed at which deal moves forward.

The Tata group is acting in concert with partner Fiat’s tractor company CNH which is represented in India by New Holland. Last month, Fiat boss Luca Di Montezemolo went on record to say that Fiat would extend its partnership with Tata group to get into tractors through the PTL bid. However, Tata group’s flagship, Tata Motors, is not directly involved in the deal. A Tata Motors spokesperson confirmed the company’s non-involvement. “There is no such proposal before the Tata Motors’ board,” he said.

M&M confirmed its ongoing interest in the deal by making an announcement on the BSE on early Monday. Last month, M&M was rumoured to have submitted a non-binding offer for PTL at Rs 350 per share which was rejected by the Actis-Burman combine. PTL has already witnessed a round of bidding last month. Subsequently, the bidding period was extended as Actis and the Burmans were unhappy with the valuations and contenders who entered the race at a later stage asked for an extension. Sources close to the deal confirm that valuations being talked about this time around are an improvement on the last round’s.

Sources also say that PTL’s valuations are being driven by its engine company Swaraj Engines which is a joint venture with Kirloskar group and supplies engines to PTL and Swaraj Mazda. Punjab Tractors itself comprises several divisions spanning tractors, harvestors, forklifts, a foundry and a components division. The company’s valuations though will also be impacted by the receivables sitting on its books. Currently PTL’s receivables are worth more than Rs 500 crore. Receivables were a problem when Actis bought into PTL in 2003

Indica rides topgear on sales

2007-03-05T21:26:00.000-08:00

TATA Motors, which has witnessed a 21% rise in passenger car sales during the first 11 months of 2006-07, has already surpassed last fiscal’s annual sales of 1,88,856 units.

The major growth driver during the fiscal 2006-07 has been Indica sales, which has grown by 31%. Accordingly, cumulative passenger cars sales in the domestic market for the 11-month period of 2006-07 stood at 2,01,133 units.

“Tata Motors has crossed last fiscal’s total sales of 1,88,856,” a release issued by the company said. Cumulative sales of the Indica at 129,407 units registered a growth of 31% over the previous year, while cumulative sales of the Indigo family at 29,942 units registered a decline of 14% over last year.

Source:Economictimes

Bajaj Auto to invest Rs 300 Cr in bike retailing

2007-03-01T03:53:00.000-08:00

Bajaj Auto Limited would invest Rs 300 crore for showroom retailing of premium bikes across the country by March 2008, a company official said. The company was in the process of rolling out Probiking Showrooms at different locations in the country, Bajaj Auto Vice President K Srinivas said.

Srinivas said Probiking Showrooms would be owned by the company and would only sell premium bikes in the 200 CC category. He said the company would open 55 such showrooms across the country by March 2008. At present, the company has six Probiking Showrooms.
Srinivas said currently, the company was selling 3500 units of premium bikes per month.

He said the target was to double that, for which such high-end retail showrooms were being put up. Overall sales of the company was two lakh units per month, Srinivas said, adding that all-India market share was 34 per cent. The eastern region contributed 10 per cent of overall turnover of the company.

Yamaha India may shut shop

2007-02-28T03:43:00.000-08:00

Yamaha may shut shop if numbers don't improve.

Japanese motorcycle major Yamaha may be lookingto shutting operations in India if its turnaround indicators do not work out as planned. According to an internal circular, dated February 12, 2007, and signed by Yamaha Motor India MD T Ishikawa—a copy of which is with ET-”the top management is closely monitoring ”its new “marketing strategy and productivity of manufacturing” indicators. “If either does not go as intended the management is ready to shut down the operation here,” the notice says.

When contacted on email, Yamaha Motor India director, sales and marketing Takahiro Maeda refused to comment on the issue. Sources in the auto industry say in the past three-four months, Yamaha has lost several senior managers including VP finance Sunil Vadhera, marketing head Atul Gupta, and head of manufacturing Rajiv Agrawal. Part of the reason for the attrition, say sources, is the company’s south-bound sales graph and uncertainty over its future. A Yamaha official confirmed the exits and said that it was a “personal choice” on the part of these executives. In January, 2007, Yamaha’s sales were 9,904 units, which officials say is among the lowest it has ever hit in India. Last January, its sales were 15,105 units.

The January 2007 sales are a sharp 50% drop from the December 2006 tally of 18,136 units. According to Yamaha officials, the company is in an uncomfortable situation financially although its parent continues to do very well globally. “The company has gone into losses and sales have been hit very badly,” said a Yamaha India official. “But the management is trying out new products and marketing strategies to revive its sales.”

The circular also refers to the company’s financial health, saying: “It is a matter of great distress that the financial condition of the company is further deteriorating and accumulated losses are continuously increasing.” The company has accumulated losses worth Rs 1,000 crore since 2001. It has around 2,000 staff on its rolls. Yamaha India officials have indicated that the company is planning to invest nearly Rs 1,600 crore over the next five years.

The Japanese company bought over partner Escort’s stake in the two-wheeler maker in 2001 and turned its Indian operations into a 100% subsidiary. It’s not clear how Yamaha’s dipping fortunes will affect its joint venture talks with Bajaj Auto which, sources say, are proceeding as planned. Although, there is no confirmation on this, sources say that the JV, if it works out, will be a separate venture from both Bajaj Auto and Yamaha Motor India.

Source:Economic Times

Bajaj selects Chakan for 4 Wheelers

2007-02-27T03:36:00.000-08:00

Bajaj Auto Ltd has said it is close to setting up a new manufacturing plant at Chakan near Pune for its foray into the four-wheeler segment, while also mulling over setting up a production unit in Brazil for two wheelers. "We are under negotiations to get land for our new plant. The plan is to set up a new goods carrier manufacturing facility in Chakan, Pune," Bajaj Auto Ltd Vice-Chairman Madhur Bajaj said. He said the new goods-carrier would be of one tonne capacity on the lines of Tata Ace.

"We are first getting into the four-wheeler goods-carrier and then we will see if we can enter into the passenger vehicles also," he added. The company has been scouting for land to set up the new greenfield unit. Earlier in the week, company Managing Director Rajiv Bajaj had said that the company was mulling over Maharashtra or Uttarakhand for the plant, which would have about half a million vehicle production capacity. BAL had envisaged housing a common platform for three and four wheelers at the greenfield plant to give it the scale of operations. The four wheeler from Bajaj is expected to hit the markets in the next two years. Bajaj is also planning to set up a two wheeler plant in Brazil. "Next on the radar is a manufacturing plant in Brazil," Madhhur Bajaj said.

Madhur Bajaj said the company is also establishing a two- wheeler manufacturing plant in Nigeria on which work has already begun, he said. Speaking on the company's demerger issue, the company Vice-Chairman said: "The Chairman has expressed that he will like to take up the issue in this board meeting or the next. "The issue is very much on our minds, but we are not in a hurry and it would be taken up by the company Board," he added.

Source:Economics Times

Chennai gets India's biggest Vehicle unit

2007-02-27T03:20:00.000-08:00

Mahindra, Renault and Nissan Announce Chennai as Location for a 400,000 Capacity Production Site in India.

Following the signing of a memorandum of understanding (MOU) on Monday(26-Feb-2007), Chennai, in the state of Tamil Nadu, has been announced as the location of what will potentially be one of the largest automotive production sites in India, with an installed capacity of 400,000 units per year, seven years after its initial production.

Automakers Mahindra and Renault will now be joined in this project by Nissan.Renault, Nissan and Mahindra are committed to investing a minimum of Rs 4,000 crore (€686 million / $902 million) in the site during the next seven years, with an equity holding of 50% by Mahindra and 50% by Renault and Nissan.

The project, a unique industrial complex, will provide vehicle production for each carmaker, plus a powertrain facility for Renault and Nissan. The MOU will facilitate M&M and its partners Renault and Nissan to manufacture passenger cars and SUVs in the 925 acre (approximately 400 ha.) facility.A range of products suited to the requirements of Indian customers will be manufactured at the new production site. Production is expected to begin in the second half of 2009.

Chennai was chosen as the location for the new production site for reasons including its well developed automotive and components industry, high education levels in its workforce, and its overall infrastructure including its port facilities. The addition of this Greenfield project will help make Chennai a truly global player in the automotive business.The partners will optimize production costs through economies of scale thanks to joint investment in plant and infrastructure, as well as purchasing synergies.