RenaultNissan to Proceed With Rival to Tata#39;s Nano (Update2)
Renault-Nissan to Proceed With Rival to Tata;s Nano (Update2)
By Michael McKee and Laurence Frost
Jan. 23 (Bloomberg) — Renault SA and Japanese affiliate
Nissan Motor Co. will proceed with building an ultra low-cost
car to rival the Nano unveiled by India;s Tata Motors Ltd.,
Chief Executive Officer Carlos Ghosn said.
“We;ll go ahead with it,;; said Ghosn, who heads the
second-largest French carmaker and Tokyo-based Nissan, in an
interview with Bloomberg Television at the World Economic Forum
in Davos, Switzerland.
Renault and Nissan are looking for sales growth in emerging
markets to make up for stagnating demand in their home countries
and the dollar;s declines against the yen, which undermines the
value of Nissan;s North American earnings. The Nano, which Tata
plans to price at about $2,500, may upstage Renault;s no-frills
Logan, which costs buyers about four times as much.
“You;re going to see Renault and Nissan coming with a
different car in the same price range for the Indian market,;;
said Ghosn, adding that the model will go on sale “within a
year and a half;; of the Nano;s scheduled introduction in late
2008.
The 30-horsepower Nano, presented Jan. 10 at the Delhi
motor show, will cut the entry price for aspiring car owners by
more than half in India, one of the world;s fastest-growing car
markets. The Logan;s price in Europe is 8,000 euros ($11,600).
Renault, Nissan and Bajaj Auto Ltd., India;s second-largest
motorcycle maker, have been conducting a feasibility study since
late last year on possible joint production of a $3,000 car.
Ghosn didn;t give details on any factory site or partners.
U.S. Forecast
Mahindra %26amp; Mahindra Ltd., which builds the Logan with
Renault, is studying ways to expand that partnership, Pawan
Goenka, president of Mahindra;s auto business, said at an
industry conference today in Detroit, without elaborating,
according to a report by the Wall Street Journal.
Nissan, Japan;s third-biggest carmaker, foresees
“moderate;; U.S. sales growth this year, even as the world;s
biggest economy suffers a slowdown, Ghosn also said. The
company;s U.S. sales in 2007 rose 4.8 percent to 1.07 million
cars and light trucks, while its market share was 6.6 percent,
placing it fifth in the U.S. and third among Japanese brands.
“We wanted to have more significant growth, but we have to
adjust to take account of the fact that the economy is
weakening,;; while a recession is less likely, Ghosn said. He
reiterated a forecast that the U.S. market will shrink to 15.5
million vehicles this year from 16.1 million in 2007.
Currency
The Japanese company is 44 percent owned by Boulogne-
Billancourt, France-based Renault, which doesn;t sell vehicles
in the U.S. Nissan accounted for almost two-thirds of the French
carmaker;s 2006 earnings.
The yen;s increase against the dollar has hurt Nissan less
than Japanese competitors because the company has more U.S.-
based manufacturing, Ghosn said. The dollar fell 6.3 percent
against the yen last year. That reduced the value of U.S.
revenue converted into the Japanese currency.
“We;re less affected than some of our competitors because
we have the highest percentage of North American-built cars;;
for the market, Ghosn said. “The percentage of cars exported
from Japan to the U.S. for Nissan is relatively limited.;;
To contact the reporter on this story:
Michael McKee in Davos, Switzerland, via
