Nissan began volume production of its new Micra on Monday at its factory near Chennai. Domestic sales are due to start in July and exports to Europe, the Middle East and Africa from September.

The Micra, built on the new Renault Nissan V platform, is assembled at the new Renault Nissan Automotive India plant in Oragadam, an industrial park. The alliance is investing about US$900m over seven years in the plant which will have an eventual capacity of 400,000 a year.

The Micra will go on display in dealer showrooms across India from 25 May when orders will also be taken ahead of first customer deliveries in July.

Compact cars make up about 70% of the Indian market, led by Maruti Suzuki with its best-selling Alto, Swift and Ritz models. Earlier this year GM launched its Beat, Ford launched the Figo and VW the Polo while Toyota has pencilled in the end of the year for the launch of the Etios, all rivals to the Micra.

Nissan Motor COO Toshiyuki Shiga said: “The start of commercial production of Nissan Micra is the beginning of a new chapter for us in India. In an exponentially growing and challenging Indian automobile industry, we are introducing a product that has been specifically designed keeping in mind the discerning consumer needs of India. The India made Micra will supply to strategic markets such as Europe, Middle East and Africa and this is only possible due to the high quality skills of Indian team.”

The plant at Oragadam, on an area of 640 acres, employs 1,900 workers today and will reach 3,000 in two years time. The company, along with its supplier park in Chennai, estimates a total of 6,000 jobs will be created in the region.

The initial production capacity at the plant will be 200,000 units with one line and the company is looking at producing more than 80,000 units in FY10.