Renault, the French car producer publicized that it is assessing the arrangements for its plant in Chennai and possibly will desert utterly the project. The company is evaluating the plans for the factory in Chennai. There are also leeways that the company may ditch the project fully and it depends on the situation in the market place, said Renault’s Chief Financial Officer, Mr Thierry Moulonguet. As per the Bloomberg report, Renault would get back its share of the €700-million investment and put down Nissan to build a minor, economical facility only.
The company prolongs to be India as per the Renault officials. Further, Renault outcomes the mid-size sedan Logan through its joint endeavor with Mahindra & Mahindra at Nashik in Maharashtra. Also, the company is prone to make the Logan derivatives, the Sandero hatchback and Steppe station-wagon at Nashik. Due to slump in financial conditions, during December 2008 Renault and Nissan decided for single shift at the plant in Chennai relative to two which planned earlier. In Paris that plans for the Chennai plant were only being delayed and not abandoned, said Renault officials in the January month.
Close to Chennai, Renault and its Japanese associate Nissan are investing Rs 4,500 crore in an equal joint undertaking for a four lakh a year capacity car factory at Oragadam. In the month of February 2008, they both signed an agreement with the Tamil Nadu Government which offered them enticement. In the month of June 2008 the it started functioning and the initial line is anticipated to be geared up in the first half of the year 2010.Individually Nissan is creating a factory to make light commercial automobiles in a joint endeavor with Ashok Leyland near Chennai, which also has been feigned the backburner.The Government had not received any information from Renault about its decision to abandon or hold back the project, said an official from the State Government. For seven years, the concord offered for the companies to build the investment in stages. The operation associated to Nissan’s side of the plant is on in bursting dangle and slow as far as Renault’s stripe is fretful, as per the saying.
Renault said that its concentration for 2009 would be to slash costs and decrease capital investment. Also, Renault is receiving €3 billion as loan from the French Government. From the press release it is observed that the company would concentrate capital expenditure and research development programmes on premeditated projects which comprises electric vehicles and environment-friendly engine performance. By scheming the total salary costs, the company would intensify the policy of callousing fixed costs. To the complete, investments made earlier at the international echelon will be oppressed. For the vehicle projects, the investments have been deferred at Chennai and overdued at Tangiers (Morocco). As per the release, the total investments in the year 2009 will be a minimum of 20% lower than that in the year 2008.The revenues for 2008 were €37.7 billion, 7 per cent down over the year, and net income €599 million, said Renault. Further, it has stated that a second-half loss of €982 million in 2008 in opposition to a profit of €1.5 billion in the first half of the year.