The Telegraph
Since 1st March, 1999
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Nissan car to roll out of Maruti plant

New Delhi, June 2: Japan’s Suzuki Motor Corporation, the parent of carmarker Maruti Udyog Ltd, today announced a deal with Nissan Motor Company to broaden their existing business ties that will include production of Nissan cars at Maruti’s plant in Gurgaon.

“Nissan and Suzuki will start manufacturing collaboration in new emerging markets by sharing their respective manufacturing facilities. This activity will start at Suzuki’s plant in India,” Maruti Udyog said in a statement issued here today.

Nissan is Japan’s second biggest carmaker after Toyota and the deal with Suzuki Motor is designed to use each other’s manufacturing facilities and share development costs as competition intensifies across the world’s car markets.

Maruti Udyog’s managing director Jagdish Khattar explained to reporters why the strategic tieup was such a good fit. “Suzuki is a big player in small cars, while Nissan is one of the largest player in big cars. The two players have decided to complement each other globally. And here in India, Maruti will have a role to play,” he said.

Khattar refused to say which Nissan model would be made in India and whether the deal would lead to expansion of Maruti Udyog’s facilities.

“The finer details, including the financials, are still being worked out. It will take some time. Expansion will take place when we are ready,” he added.

Suzuki Motor has a 54.2 per cent stake in Maruti Udyog. Khattar said, “Maruti and its stakeholders stand to gain from the business collaboration between Suzuki and Nissan.”

Soon after the announcement was made in Tokyo earlier in the day, Maruti's share price shot up by almost 13 per cent on the Bombay Stock Exchange to close at Rs 769.40. At one stage, it hit a high of Rs 779.

Under the agreement announced in Tokyo, Nissan will supply a minivan to Suzuki from the end of this year on an original equipment manufacturer (OEM) basis. Suzuki, in turn, will build another mini vehicle for its partner. Both products are aimed at the Japanese market.

At present, Suzuki supplies minicars to Nissan while a Nissan affiliate ' Jatco Ltd ' supplies automatic transmissions to Suzuki.

From 2008, Nissan will supply a compact pick-up truck to Suzuki on an OEM basis for the North American market while Suzuki will provide a new A-segment vehicle to Nissan on an OEM basis to be sold mainly in Europe.

“Through our existing agreement with Suzuki, we have built up a relationship of trust and partnership for mutual benefit,” said Toshiyuki Shiga, chief operating officer of Nissan.

“The expansion was part of Nissan’s continuing drive into new market segments and further global expansion, as set out in the Nissan value-up business plan,” he added.

Suzuki president and chief operating officer Hiroshi Tsuda said the expansion of business collaboration with Nissan would strengthen Suzuki’s global competitiveness through pursuit of economies of scale in production volume by additional OEM business opportunities.

Nissan currently sells the Moco minicar, which is rebadged from Suzuki’s MR Wagon, as well as two other models supplied by Mitsubishi Motors. These are the Otti minicar, based on Mitsubishi’s eK, and the Clipper range of mini-trucks and vans, which is derived from Mitsubishi’s Minicab.

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