Although the broad contours of the proposed agreement with Ashok Leyland to build a range of small cars is yet to be outlined, Nissan’s intention is clear — counter Volkwagen’s plans with Suzuki to target the compact car segment.
Nissan is currently in a sourcing pact with Suzuki for the compact car, Pixo (known here as the Maruti A-star), which it sells in the European market. This pact, however, may not get extended after its expiry in 2012, as Germany-based Volkswagen, which has its own set of aggressive plans with Suzuki (it recently bought a 20 per cent stake in it), would likely block the latter’s plans with Nissan.
The demand for small and fuel-efficient cars had zoomed in the European region as well as across key markets of the globe over the past few years. Nissan would perhaps be left with just one small car, Micra, in Europe when the deal with Suzuki draws to an end.