Renault-Nissan in talks with Ashok Leyland for making cars

Chennai, March 16 : Renault-Nissan chief executive Carlos Ghosn Tuesday confirmed that the alliance is in talks with Indian truck maker Ashok Leyland for making small cars.

"There is a sizeable market for cars in the sub-B segment in all the developing countries. We are in talks with Ashok Leyland for exploring possibility of making cars in that segment," Ghosn told reporters here.

In India, Frech Renault and Japanese Nissan have a 200,000 units per annum car plant near here which would go on stream Wednesday.

Renault has a joint venture also with Mahindra and Mahindra (M and M) for making Logan car while the Japanese Nissan Motor Company has tied up with Ashok Leyland for making light commercial vehicles.

In addition, Renault-Nissan has tied up with Bajaj Auto Ltd to design and manufacture an ultra low-cost car.

Ghosn said none of the group's Indian alliances were overlapping.

According to him, the partnerships are progressing fine though he is unhappy with the sales of Logan.

Speaking about the joint venture with M and M, he said: "We are discussing on repositioning Logan. We need to be little more nimble in the market. The conclusion has not been made. Logan will stay in Indian market."

Explaining the logic behind tying up with Bajaj and Ashok Leyland both not having any experience in making cars, Ghosn said: "We (Renault and Nissan) are car makers with technology to make cars. What we need is people with the knowledge of frugal engineering. Multiple partners allow us to learn more like frugal engineering, frugal product planning."

He ruled out Renault-Nissan going alone in India in the near future after imbibing frugal engineering, saying "the learning will not be complete."

Ghosn also said equity swaps would happen between two equals or with players who are strong in a region.

"Equity swaps are done largely as a matter of leverage and showing commitment to the partnership," he added.

He called reports of Renault's equity swap with German Daimler AG as speculative.

"This industry is about scale, technology and competitiveness. We are talking with many potential partners and companies. The share swap with Daimler has not been decided," Ghosn said.