Nissan Halts Car Production in India, Sells Stake to Renault
In a significant move, Nissan has announced it will cease car manufacturing in India, selling its 51% stake in its Chennai factory to its joint venture partner, Renault. This decision comes after the company faced challenges in gaining market share despite investing over 550 million euros and committing an additional 140 million euros for new product development. While Nissan executives maintain that the company is committed to its Indian operations, they will now rely on Renault for manufacturing its models at the Chennai facility.
Challenges in the Indian Market
Nissan’s journey in the Indian automotive market has been fraught with difficulties. Currently, the company offers only one locally-produced model, the Magnite, which has seen disappointing sales figures. In the fiscal year 2025, Nissan sold just 28,000 units, capturing a mere 0.7% of the total industry volume of approximately 4.1 million units. This lack of market penetration has prompted Nissan to reassess its manufacturing strategy in the country.
Frank Torres, president of Nissan India, along with local managing director Saurabh Vats, emphasized that the company will continue to introduce new models in India. Torres reassured stakeholders that there are no plans for Nissan to exit the market, despite the factory sale. He stated, “We are here to stay, and there are no reasons for us to leave,” addressing concerns about potential withdrawal similar to actions taken by other automakers like General Motors and Ford.
Future Plans and Collaborations
Despite the factory sale, Nissan’s operational strategy in India remains intact. The company will continue to source vehicles from various manufacturers, not limited to Renault. Historically, Nissan has collaborated with Maruti Suzuki to produce a mini hatchback for markets outside India. Looking ahead, Nissan plans to introduce a premium five-seater SUV and a seven-seater variant, both sharing a platform with Renault. Additionally, the company aims to launch a multi-purpose vehicle (MPV) priced under 10 lakh rupees, competing in the same segment as the Maruti Ertiga and Renault Triber.
The Chennai factory, which has a production capacity of 400,000 vehicles per year, is currently underutilized, with only a third of its capacity being utilized by both Renault and Nissan. This underperformance highlights the need for strategic adjustments as both companies navigate the competitive landscape of the Indian automotive market.
Renault’s Commitment to India
While Nissan adopts a more cautious approach, Renault is poised to increase its investments in India and explore electric vehicle opportunities. Luca de Meo, Global CEO of Renault, stated, “India is a key automotive market, and Renault Group will put in place an efficient industrial footprint and ecosystem.” The company aims to replicate its past successes with models like the Duster SUV and Kwid mini, indicating a renewed focus on the Indian market.
As the ownership structure at the Chennai factory changes, Renault and Nissan will continue to collaborate through the Renault Nissan Technology and Business Center India. Nissan will retain a 49% stake, while Renault will hold 51%, ensuring ongoing joint operations in the region. This partnership reflects both companies’ commitment to adapting to the evolving automotive landscape in India.
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