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November 8, 2005

EXCLUSIVE: INDIA: Nissan begins outsourcing non-core activities

Nissan North America, the US arm of the Japanese car maker, is to outsource some non-core work to India.

Nissan North America, the US arm of the Japanese car maker, is to outsource some non-core work to India.

Currently, the work is done by 150 employees at a Nissan facility in Smyrna, Tennessee, where it also has its main US vehicle manufacturing operation.

But, in an attempt to improve efficiency, the work has been outsourced to Genpact (formerly GECIS, a part of GE) and will be managed from its facilities in Gurgaon, Hyderabad and Bangalore.

Genpact provides sales & marketing analysis, financial services, and finance and accounting information technology services.

Nissan has not disclosed the cost savings it hopes to achieve by outsourcing such ‘back office’ activities.

Nissan has previously considered outsourcing information technology (IT) related jobs to India.

Nissan CEO Carlos Ghosn – renowned for his emphasis on cost reductions during his time running the car maker in Japan – was in India last year scouting for IT companies to outsource work to.

Meanwhile, Nissan has major plans to expand its vehicle operations in India.

According to Neeraj Garg, country head and director of marketing) India is part of Nissan’s global ‘Value-Up’ programme, through which the car maker aims to produce 4.2 million cars worldwide by 2007.

Nissan entered India with a ‘soft launch’ – importing and selling only the X-trail compact SUV through a few dealers in large cities. Average monthly sales are only about 25-30 units.

However, the Renault-Nissan group has linked with the Mahindra and Mahindra group to manufacture the Dacia Logan in locally by 2007.

Deepesh Rathore

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