Fire destroyed major warehouse that supplies parts to a Renault-Nissan plant in India

Article by Christian A., on May 15, 2013

A fire last Thursday destroyed a major warehouse that supplies parts to a Renault-Nissan plant in Chennai, India. However, Nissan has announced that this fire is not likely to have an impact on alliance operations in the country. A Nissan spokeswoman sent an e-mail to Automotive News Europe last Friday. She said that production is continuing typically and that this incident won’t affect production or exports from India.

Third-party supplier Yusen Logistics Co. is operating this warehouse, which contains spare parts and accessories used in the plant on the southeast coast of India. The spokeswoman also revealed that the alliance was working on a contingency plan to reduce any possible interruption to the usual supply of aftersales vehicle parts from Yusen.

The alliance plant, which can build 400,000 units annually, produces models for the domestic car market in India as well as for export. Nissan's Web site revealed that the $1 billion plant, which started operating in March 2010, builds the Nissan Micra subcompact and the Renault Koleos and Fluence. The fire didn’t result to any injuries.

A subsidiary of Renault Nissan, the Renault Nissan Automotive India Private Limited was established in 2005 to serve a manufacturing center for a number of models for the Nissan and Renault brands. Renault Nissan Automotive India Private Limited operates a manufacturing plant in Oragadam near Chennai, India, with a production capacity of around 400,000 vehicles per year. This 400,000 production capacity is divided equally between Renault India Private Limited and Nissan Motor India Private Limited.

The Renault-Nissan alliance is a strategic partnership between Renault and Nissan, including their respective subsidiaries. By late 1990s, Nissan suffered from severe financial difficulties, prompting it to look for a partner and had talks with Daimler. In 1994, Renault announced plans to sell shares to public investors and was eventually privatized in 1996. It then commenced the search for a new partner, and Nissan, along with BMW, Mitsubishi and PSA Group, were among the candidates.

Daimler eventually ended up with Chrysler, and Nissan – badly needing a new partner – was chosen by Renault. The strategic alliance between Renault and Nissan was officially commenced in March 1999. The Renault-Nissan alliance has made it clear that the partnership is neither a merger nor an acquisition, as the carmakers are joined through a cross-sharing agreement.

At the formation of the alliance, Renault acquired 36.8 percent of Nissan's outstanding stock, while the Japanese carmaker vowed acquire shares in its partner when it becomes financially able. In 2001, Nissan fulfilled its vow and purchased a 15 percent stake in Renault. The French carmaker then hiked its stake in the Japanese company to 44.4 percent.

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Topics: renault, nissan, india, plant

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