PARIS (AP) - Renault SA said Thursday it has signed an agreement to build a car plant in India, one of the world's fastest-growing automobile markets, and said its Japanese partner Nissan may also build vehicles at the facility.
Renault has signed an agreement to build the plant with its Indian partner Mahindra & Mahindra Ltd., Renault and Nissan CEO Carlos Ghosn said. Nissan, which Ghosn also heads, will decide within four months whether to invest in the facility, which will produce half a million vehicles annually by 2012. The Indian plant is set to open in 2009.
''The strengths of Mahindra and Renault will go a long way in making India a key global automotive market,'' Anand Mahindra, the Indian company's vice chairman and managing director, said in a statement.
Announcing the deal at a Paris news conference Thursday, Ghosn called it ''a great opportunity for Renault's development'' in India - a market he predicted will grow 10 percent annually to reach 2 million vehicles by 2010.
Renault, Nissan and General Motors Corp. last month broke off talks that had explored a possible extension of the Renault-Nissan alliance to include the U.S. automaker. GM said such a move would have benefited Renault and Nissan shareholders more than its own.
The Mahindra Renault Ltd. joint venture, launched last year with an investment of $160 million, is already set to begin manufacturing Renault's low-cost Logan sedan in India from the first half of 2007, at a rate of 50,000 vehicles annually.
The new plant will make ''a range of Mahindra as well as Mahindra-Renault products,'' Renault's statement said, without giving further details.
Ghosn also declined to give an investment figure or identify a site for the new Mahindra Renault facility, to be owned 50-50 by the two partners. But he said the benchmark to beat is Nissan's plant in Ghangzhou, China, which cost 35 percent less than an equivalent U.S. production site.
Nissan Motor Co. said Thursday it was in ''active discussions'' on joining Mahindra Renault and had pulled out of talks on a possible Indian venture with rival Suzuki Motor Corp. The two Japanese carmakers will continue separate plans to market an Indian-made small car in Europe, Nissan said.