Tamil Nadu set to settle Rs 2,900-crore tax dispute with Nissan Motor

Tamil Nadu is set to settle the Rs 2,900-crore tax dispute with Japanese automaker Nissan Motor in the next few months.

The development comes two months after the state revived Nokia’s mobile-manufacturing facility, once the world’s largest, which it closed down in 2014 owing to a Rs 21,000-crore tax dispute. Salcomp, Foxconn, and other companies have acquired the 210-acre facility in parcels.

The agreement with Nissan has got the Cabinet’s nod, said sources, adding it would be signed soon.

After taking office three years ago, Chief Minister K Palaniswami said his government would work on sorting out issues with both Nokia and Nissan, two high-profile tax cases.

While the state government will continue to offer the incentives as promised, Nissan will give up its claims on input tax credit, said sources.

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A Nissan spokesperson said: “We are committed to working with the Government of India. Nissan is proud to play a role in the ‘Make in India’ effort and we have created over 40,000 jobs in India, directly and indirectly, and contributed to the economic growth of Tamil Nadu, where we have invested around $1 billion.”

Nissan, along with its French partner Renault, had set up a car-manufacturing facility at Oragadam, near Chennai in 2008, to cater to domestic and export markets.

Almost five years ago, the dispute led to the state government stopping refunds to Nissan and the company took the state to court, according to reports. The state has offered tax sops to investors, including investment promotion subsidy (IPS) and VAT (value-added tax) refunds. While the government was ready to give the subsidies to the carmaker, it refused to acknowledge the VAT dues Nissan claimed.

It was in the second half of 2017 that the company took the matter to international arbitration.

The tussle led Renault Nissan Automotive India to say it would hold off its plans to invest Rs 5,000 crore in the facility.

The Industries Department of Tamil Nadu had then alleged the companies had changed their business models after signing the MoU, enabling them to avail of the Rs 5,125 crore eligible incentives to them much before completing 21 years as stipulated in the deal. According to the conditions, the company can avail of a benefit of up to 115 per cent of the eligible investment, which is around Rs 5,125 crore, in around 21 years.

Two marketing firms — Nissan Motor India and Renault India — were floated to sell cars manufactured by the consortium to these two firms, thus taking advantage of the 14.5 per cent VAT to all cars.

Normally cars sold in the state attract a VAT of 14.5 per cent, while those sold in other states pay 2 per cent. There is zero duty on exported cars.

However, it alleged that the manufacturing company charged the 14.5 per cent VAT and sold all cars to their group companies and thus the entire tax became eligible for refund.

“On the one side, Renault Nissan Automotive India got refunds of entire taxes collected and paid by the manufacturing company which included the Input Value Added Tax on their purchases without adjustments under the conditions of the MoU executed. On the other, the same amount was claimed as Input Tax Credit (ITC) by the marketing companies ...,” said the department in a counter affidavit with the Madras High Court earlier.

Datsun brand set to go as Nissan rolls back Ghosn's expansionist strategy

Nissan Motor is likely to axe its Datsun brand, drop some unprofitable products and close a number of assembly lines worldwide as it seeks to boost profits by getting smaller, two company sources with direct knowledge of the matter said. Known internally as ‘performance recovery’ plan, the proposed steps mark a sharp break with Nissan’s strategy under ousted leader Carlos Ghosn, who pursued ambitious vehicle sales targets in the US and other major markets.

The plan is the firm’s latest attempt to pull itself out of crisis after Ghosn was arrested for financial misconduct — charges he denies. The scandal has strained an already dysfunctional alliance with Renault and thrown Nissan into disarray as it finds itself on course to book its lowest operating profit in 11 years. Sources said Nissan will likely kill loss-making variants for the Titan pickup.

A planned shuttering of under-utilised production lines will most probably hit plants in emerging markets building Datsun and other small cars hardest, they added.

The second source said all markets with factories except China were being looked at for possible reductions in production capacity. That source also said that there were no plans to close an entire plant or withdraw completely from any country.

In the US, the plan calls for fresh efforts to weed out the practice of buying market share by selling vehicles to rental car and other fleet operators at heavy discounts. “We’re trying to clean up,” a source said, adding under Ghosn, Nissan sought to meet sales objectives at any cost, including “giving away cars” to fleet customers.

Datsun brand set to go as Nissan rolls back Ghosn's expansionist strategy

A team led by Jun Seki, a senior vice-president and incoming vice-chief operating officer, is expected to unveil the wide-ranging plan this month, said the sources. Nissan declined to comment. Seki is part of a team that will see Makoto Uchida, Nissan’s head of China, take the helm.

The firm will roll back an aggressive expansionist strategy Ghosn set in motion under a five-year plan called Power 88, which aimed to raise global market share to 8 per cent by FY16 — goals that were never achieved.

The Datsun brand — revived for emerging markets under Ghosn after being phased out in the 1980s — will likely bear the brunt. The sources said problems emerged after Nissan began deploying the no-frills cars in 2014 in small markets such as Indonesia, India, Russia and South Africa. In Indonesia, after a relatively good start, Datsun cars soon began eating into Nissan sales. There had been similar outcomes in India, South Africa and Russia, one of the sources said, adding, “We ended up pushing two mainstream brands in a market where you have a 1-2 per cent market share. You can’t do that”.REUTERS

Nissan to slash 9% of workforce as first quarter profit nearly wiped out

Japanese carmaker Nissan Motor said it is axing 12,500 jobs and warned a quick turnaround in its performance was not imminent after reporting its quarterly profit was nearly wiped out.

The announcement on Thursday shows how a crisis — brought about by sluggish sales and rising costs — is worsening at Japan’s Number 2 automaker even as it tries to recover from a financial misconduct scandal surrounding ousted Chairman Carlos Ghosn.

The automaker had 138,000 employees globally as of March 2018.

Nissan bags patent related to wireless charging technology for EVs

Japanese auto major Nissan Motor Company has received an Indian patent for its wireless charging technology for electric vehicle, which could help the vehicle to charge without connecting with a charging device. The system allows charging an EV without a connecting cable, simply by parking it on a designated spot, much like charging an electric toothbrush or shaver, according to the company.

The technology, for which the company filed a patent application on December, 2013, describes a power feeding coil and a power receiving coil and sensors which could sense the output values of the power transmission to detect any obstacle between these two coils.

When the vehicle is parked at a specific parking position, the power feeding coil will be positioned below the power receiving coil under the vehicle, without both getting into direct contact.

Electric power is supplied through magnetic induction, in which as the power feeding coil is electrically charged, it would generate a magnetic field that induces current in the secondary coil, and charges the batteries. The company has also developed an advanced parking assist, to help the user to park the car properly at the designated location to help proper charging.

The patent office has granted the application earlier this week, after all the requirements for the procedure were met and hearing the company's submission.

The approval also comes at a time when the company is expected to launch its electric car, the Nissan Lear, in India during this year. The company, in January this year, told reporters that the car will be launched in India as part of its efforts to bring in eco-friendly technologies to the country. The model is part of Nissan's Intelligent Mobility offerings across the country.

In March, 2019, the company had announced about Nissan Leaf becoming the first electric car in history to surpass 4,00,000 sales across the globe, confirming its leadership in the world in the segment.

The company which started first mass production of the EV, Nissan Leaf, in 2010 and in 2014, it has reached worldwide sales of 1,00,000 units. In 2015, the sales doubled and the company updated the product with a 30 kWh battery. In 2017, the company launched the seond-generation Nissan Leaf, with ProPilot semiautonomous driving system, ProPilot Park, a parking assistant and e-Pedal, which allows the driver to start, accelerate, decelerate and stop the vehicle using only the accelerator pedal.

In 2018, the sales of this vehicle has reachced 3,00,000 units world wide. Nissan Leaf cars have driven more than 10 billion kilometers in total, said the company in March.

The product has been made available in more than 50 markets globally, till March, 2019, and will go on sale in six new markets in Latin America in the first half of this year and seven in Asia and Oceania by the end of the year, it said.