By NNN-PTI
New Delhi : French carmaker Renault and Japan’s Nissan have signed a memorandum of understanding with the Tamil Nadu government for setting up their proposed greenfield automobile manufacturing unit in Oragadam, near Chennai, at an investment of Rs 4,500 crore.
Both Renault and Nissan would have 50 per cent stake in the plant which would have a capacity to roll out four lakh units per annum over the next seven years, Renault-Nissan said in a statement.
Renault holds 44.4 per cent stake in Nissan.
Renault Executive Vice-President, Products, Plan and Programs, Patrick Pelata and Nissan Executive Vice-President, Corporate and Product Planning, Carlos Tavares signed the MoU with the Tamil Nadu government.
Renault and Nissan had initially entered into a tripartite joint venture with India’s Mahindra and Mahindra (M&M) for the proposed plant. Later M&M decided to pull out of the JV and these two companies decided to go on their own.
The Indian firm had said that it did not require the additional capacity being planned at Chennai and would instead expand its existing facility in Chakan near Pune to meet its projected requirements.
As per the initial agreement, Mahindra would have held a majority 50 per cent stake in the plant while Renault and Nissan would have held an equal 25 per cent stake each.
Mahindra manufactures and markets its mid-size sedan Logan through a joint venture with Renault.
The proposed Renault-Nissan manufacturing facility would come up in an area of 670 acre and is expected to go on stream in early 2010.