After two decades of an arm's-length association with the Indian market through a license agreement with Hindustan Motors, Mitsubishi may finally invest directly in India, thanks to a new alliance with Nissan.
Nissan will pay US$ 2.2 billion (Rs 14,600 crore) for a 34 percent stake in Mitsubishi, which effectively gives it control of Japan’s sixth-largest automaker.
Announced in May this year, this deal between Nissan and Mitsubishi will further strengthen the Renault-Nissan Alliance. Joint development of platforms, sourcing of components, sharing common production facilities and investments in future technologies are the obvious synergies to be had.
However, for Mitsubishi, this tie-up opens up huge possibilities in India, a market the cash-strapped company has only dipped its toes in because it lacked the resources to take a full-scale plunge.
Now, Mitsubishi can piggyback on Renault-Nissan’s plant in Oragadam, Tamil Nadu, which has spare capacity and a ready supplier base, for an easy Indian market entry.
But what models could Mitsubishi launch in India? A suitable platform needs to be identified or developed first, and for economies of scale, sharing this platform with Renault-Nissan is obvious. In fact, with no replacement for the Micra or Sunny planned (the all-new Micra launched at the Paris Motor Show won’t be launched in India), both Nissan and Renault (which sells the Micra and Sunny as the Renault Pulse and Scala) will have a big hole in its portfolio between its CMF-A cars (Redigo/Kwid) and the Terrano/Duster SUVs.
To bridge this gap, Renault-Nissan needs a flexible platform that can spawn new models with multiple body styles, across different segments, in a wide Rs 6-12 lakh range.
Renault-Nissan CEO Carlos Ghosn said that it was crucial to develop a B-segment platform for India and other key markets. “We are discussing what the best platform strategy is for us which will address a very important part of the Indian market”. Would Renault-Nissan be looking for a partner? “Mitsubishi could be a possibility,” he said, but also added that it was too early to commit anything until the due diligence of the scandal-ridden Japanese automaker was completed.
The most likely Mitsubishi models for India, spun off a shared platform with Renault-Nissan, could be the next-gen Mirage, a B-segment car in hatchback and sedan body styles. A wide range of SUVs could also follow.
With Mitsubishi joining the Renault-Nissan family, this alliance could eventually become a formidable force to seriously challenge Maruti.