Nissan expected to boost profits with its $3,000 car

Article by Christian Andrei, on August 26, 2010

Profitability for Nissan Motor Co. is expected to increase with its use of the low-cost production techniques used by its local partner in India as they go about producing the $3,000 car.

In a recent interview in Yokohama, Gilles Normand, Nissan's corporate vice president in charge of Africa, the Middle East and India, said that the talks with Bajaj Auto Ltd. have led to the realization that Nissan's margin on three-wheeler activities is far above the current margin on its four-wheeler activities.

Normand said further that the low-cost car will contribute to its growth in terms of "volume and profitability."

A company forecast indicates that Nissan may post an operating margin of 4% for the year that ended March 31, compared with Bajaj's 10.5% for the year that ended in March 2009. Bajaj, which is based in Pune, India, didn't make a forecast for the most recent fiscal year.

Nissan will be introducing a low-cost vehicle in 2012 to rival Tata Motors Ltd.'s $2,500 Nano, the world's cheapest passenger car. Normand said that Nissan aims to take advantage of Indian expertise in low-cost production.

Notably, about 50% of the Indian four-wheel auto market comprises models priced below $8,000. [via autonews - sub. required]

Topics: nissan, india

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