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Nissan joins 900 million dollar Indian car venture with Renault

CHENNAI, India, Feb 26, 2007 (AFP) - Japanese automaker Nissan on Monday tied up with French partner Renault's Indian venture to build a 902 million dollar plant, joining a race with rivals Toyota and Honda for a slice of the South Asian nation's expanding car market.

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For decades after independence India's roads were dominated by two ancient models, the Premier Padmini and the Ambassador, produced with technonology dating back to the 1950s.
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Indian parterner Mahindra and Mahindra will control 50 percent of the venture, with Nissan and Renault sharing the remainder, the three companies said in a joint statement.

The southern city of Chennai, known as India's Detroit, was chosen as the site of the factory, which will have the capacity to turn out 400,000 cars a year seven years after the start of production in 2009.

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Nissan and Renault are latecomers to the Indian car market, which is forecast to expand 10 percent a year to reach two million units in 2010 as an economy expanding nine percent a year boosts the buying power of consumers in the world's second-most populous nation.

"With income levels rising, upward mobility is increasing," said K.K. Mittal, a New Delhi-based fund manager at Escorts Asset Management who holds Mahindra shares in his 1.

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