Stock Watch

Global car majors Nissan of Japan and France based Renault have inked Memorandum of Understanding (MoU) with the State cabinet of Tamil Nadu. Under the MoU, these companies are looking to develop an integrated green-field car plant at Oragadam, about 50 km from here.

Last year both companies have announced the tripartite joint venture along with Mahindra & Mahindra (M & M) with the latter holding 50 per cent and the rest shared by the two overseas alliance partners

In the Indian project of green-field car plant, the partners will hold the equal share in the company that is yet to be named. Company is looking to invest Rs 4500 crore to create a manufacturing facility with an installed capacity of 4 lakh vehicles per year expected to commence by 2010. The new facility would provide employment to about 4,000 people. They expect about 50 vendors to set up shop in the neighborhood of the car plant.

The plant will have two manufacturing lines, one for each partner to make 2 lakh cars each. However, some capital-intensive manufacturing such as for power trains and stampings will be common.

Companies are focusing to partner the Indian companies and more on product lines. Globally, Renault and Nissan are partners - Renault holds 44 percent stake in Nissan, while the Japanese company holds 15 per cent of Renault.