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We’re in India to become a better company – Carlos Ghosn |
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Text: Dhruv Behl
Images: Renault-Nissan & Julian Thomas |
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March 17, 2010 was a very important day for the Carlos Ghosn led Renault-Nissan Alliance – not to mention the Indian automotive industry. This is the
first time in the history of this 11 year old alliance that these French and Japanese partners have gotten together to build an all-new manufacturing plant to produce both Renault and Nissan vehicles.
The new plant in Chennai will be able to perform assembly on 4 platforms and 8 body types simultaneously. Moreover, the plant takes the best practises from both Renault and Nissan, and applies them under one roof – a process which will be subsequently followed elsewhere as well. With 4,500 crores in total to be invested by 2012, Renault-Nissan will have a production capacity of 400,000 cars – of which 50% will be for the domestic market, and the rest for export.
The new plant is also set to change the fortunes of Nissan and Renault in the Indian market. Renault is still grappling with how to mend their partnership with Mahindra & Mahindra, which is suffering as a result of disastrous sales of the Mahindra-Renault Logan. Nissan, on the other hand, sold all of 200 cars last year in the Indian market. Ghosn’s response was that you can’t sell large numbers of cars in India if you simply import them. In order to be relevant in the Indian market, he believes, you have to source and manufacture locally – not to mention the fact that you have to produce a car that’s targeted to the needs of the domestic market. And, of course, pricing is key, which can only be competitive through local sourcing and manufacture. |
Ghosn believes that Indian automobile sales are set to triple in the next decade, and Renault-Nissan – like every other global auto major – can’t afford to be a marginal player in this growing market. Therefore, in addition to the new plant, Renault-Nissan is also working with both Bajaj and, now, Ashok Leyland to produce cars for India and other emerging markets. While the Chennai plant will begin by rolling out the new Nissan Micra, which will be positioned in the B+ segment of the Indian market, Ghosn believes that there’s plenty of room to position multiple vehicles below this price point. His team, therefore, is working hard to develop an ultra-low cost car with Bajaj – a project which has been underway for some time. Nissan is also working with Ashok Leyland to enter the LCV market in India, and have now extended this partnership to attempt to develop a low cost car for India and other emerging markets.
Ghosn justified having multiple local partners by pointing out that they’re doing different things with each partner. Plus, he believes that multiple partners allow his Group to learn more. He says they’re here not only to serve the Indian market and export overseas, but also to learn about frugal engineering and frugal product planning in order to better serve the next emerging market – they are in India to become a better company. “We know how to make cars, we want to know how to do frugal engineering,” remarked this auto industry icon, who is almost singlehandedly credited with the turn-around of Nissan.
Since the Geneva Motor Show in March this year, where Ghosn unveiled the India-made Micra to the world, rumours have been rife regarding an extension of the Renault-Nissan Alliance to include Daimler as well. While nothing has been confirmed, it’s clear that Ghosn is doing everything he feels necessary to position his Group competitively at a time when cost consciousness, and in that respect economies of scale, seem to be once again at the top of the priority list for every manufacturer. He says an equity exchange between partners, as is the case between Renault and Nissan, is a way of assuring both parties that they’re in it for the long term – and it’s the only way to ensure open sharing of information and technology. An equity exchange with Indian partners is possible if needed, but typically only tends to occur with partners of the same scope – and would therefore be unlikely to take place between Renault-Nissan and their local partners, Bajaj and Ashok Leyland, since they’re largely domestic players. In the case of Bajaj, Ghosn says they’ve put their technology and engines on the table, and asked them to assemble a car using their expertise and local knowledge, “We bring the knowledge, components and tell them to use their know-how to build great products.”
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Nissan Micra rolls off the assembly line |
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Mass production of the all-new Nissan Micra will begin in Chennai in May, and Indian sales will commence in July. The Micra has been designed and engineered in Japan for the global market, keeping India in mind, and will be exported from Chennai to over 100 countries in Europe, the Middle East and Africa – exports will begin in September this year. Nissan will produce 110,000 units of the Micra in Chennai in 2011, with the aim of taking that figure to 180,000 soon thereafter. The company claims that the quality of the cars coming out of their Chennai facility is exactly the same as those in Japan. Chennai is one of four main hubs, which also includes China, Thailand and Mexico, for a new range of global cars from the Alliance. Renault, on the other hand, will begin assembly of the Fluence saloon and Koleos SUV (shown at the Auto Expo), both through CKD kits, in mid 2011.
The Micra will be launched with a 1.2 liter, 3 cylinder, petrol engine producing about 75 horsepower. This engine is likely to offer impressive fuel economy in the range of 20km/l. A direct injection, supercharged version of the same engine, and a CVT (Continuously Variable Transmission), as well as a stop-start system, will also be offered in Europe. A four-cylinder diesel engine will also likely be offered at a later date. 80% localization means that the car will be very competitively priced, and should be aimed squarely at the likes of the recently launched VW Polo at Rs. 4.5 lakhs.
Carlos Ghosn pointed out that globally there have, thus far, been two types of small cars – sophisticated and, therefore, expensive, or simply cheap. In the case of the Micra, which sells very well in Europe, Nissan claim to have been successful in merging these two traits, which is to say develop a sophisticated car, which puts an emphasis on low emissions, safety and performance, but built at a very competitive price.
The Micra, largely speaking, retains the exterior dimensions of the outgoing model, which puts it in Suzuki Swift territory – although interior space does seem to have been maximised to give the cabin a fairly spacious feel. In addition, the boot seems to be fairly deep, which should ensure that the car is quite comfortable for rear seat passengers and practical as well. The unique styling of the outgoing model has been toned down to appeal to a larger audience. However, the car still retains quite an interesting, largely rotund, shape on the whole.
This interesting styling is carried over on the inside as well – with a unique circular pod for the HVAC controls. However, the cars on the factory floor were in export trim, and it’s not clear exactly which options will make it to India. Certainly features such as the two-tone dash, multi-function steering wheel, and automatic climate control won’t make it into anything other than the top model – if that. And even that won’t feature the Bluetooth capable navigation system that we saw on some of the cars on the floor. The Micra will, however, likely feature keyless-entry-and-start, which is a Renault-Nissan standard. Moreover, Nissan claim that they’re aware of how quickly the Indian market is evolving and will have the ability to adjust equipment levels very quickly based on initial feedback from the market.
The cabin quality, on the whole is very high. However, it does appear that Nissan have imbibed some of the frugal engineering tricks that they’ve been seeking, since the door panels and handles seemed to be made of decidedly less expensive material – still well put together all the same however. The real key at the end of the day will, of course, be price.
The Micra is the first car built on an all-new platform for Renault-Nissan – internally referred to as the ‘V’ platform, which is meant to stand for versatility. Three body types will take shape from the platform, and come out of the Chennai facility – the hatch, a sedan, and a compact MPV. It seems likely, therefore, that the sedan will also be offered in India at some point in the future. Vincent Cobee, Nissan Corporate Vice President and Program Head of the V Platform, says that the Micra is a “trend-changing” car as a result of its new platform. Typically, in the industry, every model tends to get larger and heavier with each new generation to meet evolving crash and emission standards in different markets. In the case of the new Micra, however, through clever engineering, they’ve succeeded in meeting these elevated standards, and yet made the car lighter than the previous generation. In European spec, the new Micra is a full 90 kilos, or 9%, lighter than the previous generation model. Lower weight is important because it leads to better fuel efficiency. Moreover, Cobee claims that quality will also be improved as a result of the parts count being reduced by almost 20% – for instance 83 parts have been reduced to 50 in the dashboard alone. Fewer parts, of course, mean a smaller likelihood of an individual part failing.
The previous generation Micra is built on the same platform as Renault’s small car, the Clio. It stands to reason, therefore, that the next gen Clio will also share the V-platform. The question remains, however, if the two partners will compete in the small car space in India. While it may lead to cannibalization, it’ll also lead to larger overall volumes and better economies of scale.
Either way, if you’re currently in the market for a small car, you can consider yourself highly sought after by various global manufacturers – and come July, you can add Nissan to that list
as well.
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