Amid Honda-Nissan Merger Talks, Renault-Nissan's Indian Ties Under Scrutiny

Although it is uncertain how their Indian businesses will be immediately affected, two Japanese auto giants, Honda and Nissan, are moving toward a possible merger. Nissan shares the Oragadam facility near Chennai with French automaker Renault as part of their partnership.

A specialized manufacturing plant for the Renault-Nissan Alliance, Renault Nissan Automotive India (RNAIPL), has manufactured more than 4.5 million powertrain units at its Oragadam site as of October.

Since its founding in 2010, RNAIPL has produced more than 2.75 million Renault and Nissan automobiles for the Indian and international markets. Three different types of gearboxes and seven different engine types have been produced by RNAIPL since production began in May 2010.

Within six years of beginning production, RNAIPL's powertrain business manufactured 1 million engines in 2016. In addition, the division has produced more than 160,000 units of EV reducer components for export.

Nissan Motor Corporation's director, representative executive officer, president, and chief executive officer, Makoto Uchida, told reporters in Tokyo that the company is also looking at potential synergies with Renault. He went on to say that they will keep talking to their current partners. "Nothing is decided today," Uchida said. They can continue the conversation if they identify a potential project that enhances brand power.

Frank Torrés, the president of Nissan India Operations, stated in a recent interview with PTI that the Japanese automaker's ambitions to improve its Indian operations are still in place. According to him, Nissan wants to expand its workforce in India by adding 600 employees to the Chennai facility in order to add a third shift. At the same time, Nissan declared that it will slash worldwide output by 20% and eliminate 9,000 jobs.

"Despite this global turmoil, Nissan is placing a large bet on India, and the plans (for India) are still in place," he stated.

Nissan India previously declared in July of this year that, as part of its strategy to restructure its business in the rapidly expanding Indian auto industry, it would launch five models over the following 30 months. By the end of 2025–2026, the company wants to triple its export and domestic volumes to 100,000 units annually.

Both Japanese auto giants now retain a small portion of India's domestic auto industry, with Honda accounting for 1.39 percent and Nissan for 0.73 percent of the country's 4 million-unit vehicle market.

This fiscal year, exports have increased dramatically between April and November, while domestic dispatches have decreased for both. As its Elevate became a huge hit in Japan, Honda Automobiles saw a 154% boost in shipments from India, while Nissan reported a robust 61.6% growth.

According to industry experts, the possible merger might help both businesses in the Indian market. According to an industry veteran, "Chinese companies like BYD are expanding their presence in India, and the two Japanese behemoths intend to work together on technologies and expand their synergies to compete with Chinese EV players. Offering a larger selection of goods, standardizing car platforms to save money, and sourcing are a few examples of possible synergies."

As part of their global alliance, Toyota and Suzuki have teamed together to share technologies in India, including hybrids and cross-badged cars.