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Nissan to cut sourcing from Maruti

By Swaraj Baggonkar in Mumbai
December 04, 2008 10:52 IST
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Nissan Motor Company, Japan's third-largest auto maker, has decided to cut its small car sourcing target from India's biggest car company Maruti Suzuki by 80 per cent in view of the severe downturn in Europe's automobile market.

Nissan will now source just 10,000 units of Maruti Suzuki India's recently-launched A-Star for Europe against the earlier agreed target of 50,000 units.

Nissan will rebrand the car Pixo for Europe after some exterior and interior engineering changes.

The deal, negotiations for which began in 2006, is for a single order and not an annual export commitment. The two are, however, yet to draft the finer details of the deal.

"Discussions with Nissan are still on. Issues such as the number of cars, pricing and start date are yet to be sorted out," said Mayank Pareek, executive officer (sales and marketing), Maruti Suzuki.

An e-mail query to Nissan went unanswered.

Nissan's decision to downsize its sourcing comes at a time when October sales in Europe dropped almost19 per cent to 40,629 units.

Maruti Suzuki, however, has announced that A-Star exports, also to Europe, will stick to the January schedule. Maruti Suzuki plans to export 100,000 units, including to Europe, double its target for India.

The company has signed an agreement with the Adani Group for a mega car terminal at the Mundra Port and Special Economic Zone (MPSEZ) in Kutch, Gujarat.

The initial investment for this project will be Rs 100 crore (Rs 1 billion), of which Maruti Suzuki will invest Rs 40 crore (Rs 400 million).

Nissan's Indian subsidiary, Nissan Motor India, is not involved in the export venture with Maruti Suzuki. The Indian company has two separate ventures with two Indian companies -- Bajaj Auto and Ashok Leyland.

Nissan in India also has established a 50:50 joint venture company with French car maker Renault for a Rs 4,500-crore (Rs 45 billion) car manufacturing unit at Chennai.

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Swaraj Baggonkar in Mumbai
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