Nissan Motor Company, Japan’s third-largest auto maker, has decided to cut its small car sourcing target from India’s biggest car company Maruti Suzuki by 80% in view of the severe downturn in Europe’s automobile market.
Nissan will now source just 10,000 units of Maruti Suzuki India’s recently launched A-Star for Europe against the earlier agreed target of 50,000 units. Nissan will rebrand the car Pixo for Europe after some exterior and interior engineering changes.
The deal, negotiations for which began in 2006, is for a single order and not an annual export commitment.
The two are, however, yet to draft the finer details of the deal. Nissan’s decision to downsize its sourcing comes at a time when October sales in Europe dropped almost 19% to 40,629 units.
Maruti Suzuki, however, has announced that A-Star exports, also to Europe, will stick to the January schedule. Maruti Suzuki plans to export 100,000 units, including to Europe, double its target for India.
We maintain a BUY on Maruti Suzuki with target price of Rs674.