French carmaker Renault has announced it is going to build the low-cost Logan in India in collaboration with its partner there Mahindra and Mahindra. At a Paris news conference, Renault’s chief executive Carlos Ghosn said they will build a new factory in India that will eventually produce half a million cars a year. The Indian company’s managing director Anand Mahindra suggested that eventually they might export cars from there.
Mahindra, which is India’s largest maker of vans and tractors, produced fewer than 10,000 vehicles last year, compared with Renault’s two and a half million. Its turnover and workforce is similarly much smaller than Renault’s. But India is one of the world’s fastest-growing car markets and Ghosn said he expects it to expand by 10% a year to reach two million vehicles by 2010.
Japan’s Nissan, which has alliance with Renault, said it may also make vehicles at the new factory which is due to open in 2009 and reach full capacity by 2012. In the meantime an existing Mahindra plant will be used to produce 50,000 Logans a year.
The low cost car is designed for first time buyers in developing countries. Renault plans to build them in Russia, Iran, Morocco, Colombia and China.