Ghosn Eyes Mahindra for Budget Car

Ghosn Eyes Mahindra for Budget Car

The Nissan Motor Co. CEO Carlos Ghosn said that Mahindra & Mahindra Ltd. will likely be its local partner for the company's low-price-car project for the Indian market.

Ghosn, speaking at a round-table press conference in Bangkok, said that the Japanese automaker is seriously studying the Indian project and will have sufficient information to make a decision on whether to start making a budget car when one of its main rivals in India, Tata Motors Ltd., launches its own low-cost, $3,000 car in 2006.

"If it's possible to be done, it will be done in India. If it's done, it will be done for Renault and Nissan," he said. "Mahindra would be the natural partner. Although we haven't finalized any deal yet, it's rather obvious that Mahindra is our Indian national partner," Ghosn said in response to a query on who might be Nissan's local partner for the budget-car project. "We'll be ready when the [Tata] car comes to the market as we'll have enough information. If it makes sense, we'll be ready to start [production of our own model]."

Ghosn added that Nissan's investment in new technologies such as lithium-ion batteries will help the company narrow the gap or even put it ahead of competitors down the road. Last week in Tokyo, the CEO said that he saw ready opportunities for a low-cost car in India on the back of a burgeoning middle class. The car will be using different set of equipment but the company is considering whether trusted parts like Nissan strut bellows should be integrated.

Meanwhile, Thailand, the world's top producer of light pickups, unveiled an incentive plan to persuade automakers to begin producing environmentally friendly passenger cars. Ghosn said that Thailand's proposal to automakers was "one of the considered options" for the company, but added that the scheme appeared to favor bigger automakers in the territory.



But Ghosn said that the company was only studying the possibility, and that Renault remained focused on selling its low-cost Logan, which was introduced in India in April. Mahindra is Nissan's local partner in building the Logan. Renault, Nissan and Mahindra are also building a US$902 million factory together in the southern Indian city of Chennai.

Automakers are competing to develop feasible lithium-ion batteries, which are common in gadgets like mobile phones and laptops but have yet to be fully adapted to the more rigorous demands of a car engine. "We continue on the lithium-ion battery. We think for us it's a competitive advantage," Ghosn said. "We have a lot of technology in this area, and we think this is going to be very helpful, not only for hybrids but also for electric cars."

Nissan, which has fallen behind the Toyota Motor Corp. and the Honda Motor Co. in hybrid vehicles, recently opened a tech center in Japan dedicated to developing so-called green technologies. Additionally, the third largest Japanese automaker launched a hybrid last year. But the new hybrid licenses the technology from Toyota.



While consumer interest has rushed in gas-and-electric hybrid cars because of increasing fuel prices and global warming issues, Ghosn said that Nissan was serious about going one step further and introducing vehicles powered only by electricity. "If you have an efficient battery for a hybrid, why not go all the way and go for electric cars?" he said. "It has zero emissions of anything."

Electric cars were unsuccessful to catch on because they are costly, hard to recharge and travel limited distances. Still, several automakers are currently developing such vehicles for the mass market. Ghosn noted that Nissan was currently negotiating a deal to put a fleet of electric cars on the market.

Ghosn Eyes Mahindra for Budget Car