Renault-Nissan planning to develop economical vehicles

author image CarTrade Editorial Team
Thursday 18 July 2013, 11:24 AM

The Chief Executive Officer and Chairman of Renault-Nissan Alliance, Carlos Ghosn has officially announced the development of a joint vehicle programme, named Common Module Family-Affordable (CMF-A). Under this programme, the auto maker is planning to design and produce its vehicles only in the Indian auto market. Spearheaded by Gerard Detourbet, this kind of programme happens to be the first joint initiative started by both the auto makers in their 14-year-old venture. Industry experts are of a view that this programme underlines the growing significance of the Indian auto market in the future plans of Renault-Nissan of delivering over 10 million units worldwide by the end of 2016.

Speaking on this, Ghosn said was quoted as saying, “We are breaking new ground with CMF-A to meet and exceed the high standards of consumers in the world's fastest growing economies — particularly people buying a new car for the first time. Why we are doing this in India is because in terms of frugal engineering, this country is second to none, and if we can make a car and sell it successfully here it guarantees a market in many other emerging countries.”

With this new initiative, the joint venture between both two companies will witness two-fold in its investment to $ 5 billion in the Indian auto industry in a span of few years. Sources close to the development process stated that the first model developed under this initiative will be unveiled by the end of 2015. It must be noted that the scope of development of CMF-A includes an ultra-low cost car, which is anticipated to compete against the likes of Tata Nano. Also, working on such a model has been the dream of Ghosn, which will be soon turned into reality.

“We will not mimic a Nano but offer a high value product at price that is not very far from that. In the US, 800 out of 1,000 people own a car. For Europe it is 600, Russia 280, Brazil 200, China 60 and India is only 15. That is one of the lowest in the world. There is potential for India to be among the top five markets for Renault and top 10 for Nissan. We expect this market to grow from 3.2 million today to 4 million by 2016,” he said.

Considering that the Indian auto industry is currently going through tough times, where the growth has been continuously falling for eight months in a row, the company official said he cannot question the potential of the market

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