Report: Nissan, Renault to build $1 billion auto plant in India

Nissan Motor Co. and its affiliate Renault SA will build a $1.1 billion plant in India, Bloomberg News reported today.

The companies have reached an agreement with the southern Indian state of Tamil Nadu on the project, they said today in a joint release in Chennai, the state's capital. The plant will have a capacity of 400,000 cars a year.

The factory will also help the companies, which will have equal stakes in the project, to ship cars to overseas markets. "We see India as another export base," Nissan's Executive Vice President Carlos Tavares said in the release.

The automakers are looking for sales growth in emerging markets to make up for stagnating demand in their home countries, and the dollar's decline against the yen, which undermines the value of Nissan's North American earnings.

The India car plant will make its first car by 2010 and will manufacture four models, Nissan spokeswoman Pauline Kee said in an interview in Chennai today.