Nissan Motor looking at leveraging India as a global base for manufacturing fossil fuel vehicles

Feb 15, 2023

With 44% of the company’s line-up scheduled to get electrified globally by the end of the decade, India will have the opportunity to cater to both new internal combustion engine (ICE) vehicles and aftersales operations going forward, Nissan global chief operating officer Ashwani Gupta told ET.

Nissan Motor Co is looking at leveraging India as a global base for manufacturing vehicles that run on fossil fuels and their components, at a time when several of the Japanese company’s manufacturing units in Europe, Japan, China and the US are focusing on production of electric vehicles.

With 44% of the company’s line-up scheduled to get electrified globally by the end of the decade, India will have the opportunity to cater to both new internal combustion engine (ICE) vehicles and aftersales operations going forward, Nissan global chief operating officer Ashwani Gupta told ET.

“In Japan we (will) have the Tochigi plant fully electrified. In the United States, in Canton, one line will be electrified; in China, we have one plant electrified; Europe will be fully electrified,” he said. “But then, 44% is electrified, which means 56% still remains ICE. Plus the customers who have bought ICE will need after-sales parts. We are working on optimisation of the global footprint.”

India has three great opportunities to move forward, “to maximise opportunities for ICE engine and ICE engine components for OEMs and also for aftersales, to become a global industrial hub for BEVs (battery electric vehicles), and to support global OEMs with software development,” he said.

The move comes close on the heels of the Renault-Nissan Alliance Monday announcing fresh investment of Rs 5,300 crore in India as part of the second phase of its business transformation plan to expand global operations. This capital will be utilised to introduce half a dozen vehicles in the local market starting 2025, all of which will be developed locally and shipped to markets across the world.

In fact, India will be the sole manufacturing hub for the left-hand drive Magnite, an A-segment electric vehicle, and two SUVs Nissan has scheduled for launch, confirmed Gupta. “The A segment EV will be manufactured in India, and we are looking at (shipping to) other markets … all markets like Latin America, Brazil, Chile, Argentina, may be many markets in the Middle East (which) are (not) prepared for economies of scale. We are opening up those doors (so) that India is not limited to geography-friendly locations but also has access (to markets) where products need to be competitive,” he said.

Gupta emphasised that with the company firming up its operations in markets like the US, China, Japan and Europe over the last three years, the focus has now sharpened on India. “Now we want to shift our focus to markets which are (not only) self-fuelled by their domestic economies but also taking advantage of geopolitics. India has tremendous growth potential moving forward,” he said.

The new vehicles planned for launch mid-decade onwards will help Nissan more than double its market coverage to 40% (from the current 15%) and “will naturally” help the company grow its share 2.5 times (from about 1%), said Gupta. In the meantime, the company will work on increasing the lifecycle of SUV Magnite and drive in completely built-up vehicles to sustain the growth momentum.

“Earlier, Nissan brought in global models, localised them in India, then worked on exports. Now (we will have) local models, made in India, which will have an additional opportunity to go global,” he said.

The rebooting of India operations comes at a time when the two partners, Nissan and Renault, have decided to restructure their equity collaboration and put both firms on equal footing in terms of shareholding. As part of the deal, Nissan and Renault have pledged to pool more resources into key projects in Latin America, India and Europe, involving markets, vehicles and technologies. Nissan has also said it would invest in Renault's new battery-electric vehicle unit.

News Source : auto.economictimes.indiatimes.com