Renault-Nissan to hit capacity hurdle, plans for additional manufacturing capability

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Feb 14, 2013: Renault and Nissan which has a Joint Venture in India are stuck on the crossroads as it is very soon going to hit the capacity hurdle. Renault-Nissan are very soon going to hit the maximum production capacity of 4 lakh units per annum by next year and it would be a challenge for both the companies to look for additional manufacturing capacity. Nissan is expecting to sell 3 lakh units this year out which the company exports 1 lakh units. Both the companies have a production plant in Tamil Nadu which was set for Rs.4,500 crore and has a maximum capacity of manufacturing 4 lakh units.

Renault-Nissan which had rolled out a lot of new models in the Indian market which includes, Micra, Pulse, Duster, Fluence, Scala and many more is looking at India as the next big destination. The JV is looking forward to increase the sales figures and that is where the company will hit a capacity hurdle. Nissan is planning to come out with a car smaller than Pulse and Renault is also planning to launch its new models including a new SUV.

Renault is more upbeat with the phenomenal success of its model Duster and is looking to repeat success. The only options available for Renault-Nissan to face the capacity hurdle are to look for capacity addition in the existing plant or set up a new manufacturing base. Whatever be the decision that Renault-Nissan take, they have to take it immediately before hitting the hurdle as we have examples in India itself regarding what happens to the company when the customers have to wait for too long for a product/service.

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