Nissan Motor will set up a car factory in India with Renault and Mahindra & Mahindra in 2009, according to a news agency report on Friday.

Citing “sources close to the matter”, Reuters said the move would give Nissan its first manufacturing plant in the booming Indian market.

The report said Japan’s third-biggest automaker had been studying the possibility of joining an existing local partnership between Renault and Mahindra since November and had set a 9 March deadline for a decision.

According to Reuters, citing one source, the three automakers will jointly own the factory in Chennai (once called Madras), with initial annual output capacity of 400,000 units in 2009. Mahindra, India’s biggest utility vehicle and tractor maker, will own half of the venture, and Nissan and Renault will each hold 25%.

The factory is likely to build derivatives of Renault’s no-frills Logan car. A decision on other products, including those under the Nissan badge, will be made later, the sources told the news agency.

The three companies and the state of Tamil Nadu will make an announcement on the project on Monday, according to Reuters.

The report noted that Nissan sells only the imported X-Trail sport utility vehicle in India, with sales there totalling just 190 units last year.

Reuters added that the port city of Chennai is also home to Hyundai, Ford and BMW car factories and has a well established supplier base.

Renault and Mahindra have another joint venture that is scheduled to build the Logan at a factory in Nashik, near Mumbai, starting later this year, the report noted.