Maruti Suzuki has stopped supplying A-star models to Nissan, owing to lack of sufficient orders from the latter. The BSE-listed company, in which Suzuki Motor Corporation had 56 per cent stake, ended the seven-year manufacturing and supply contract with Nissan a few weeks ago, sources said.
Maruti Suzuki manufactured the Nissan-badged Pixo, a restyled A-star, a five-seater compact hatchback also on sale in India. In Europe, the Pixo was the entry-level car under the Nissan badge.
A Maruti Suzuki spokesperson declined to comment on the issue. A mail to Nissan India went unanswered.
In a supply agreement signed in 2006-07, Suzuki had agreed to sell the A-star to Nissan, rebadged as Pixo, for export to European countries. It was a one-time order for the supply of 30,000 units. Owing to increased demand for the Pixo, fuelled by scrappage incentive schemes introduced by several European countries, Nissan had increased the order to 50,000 units.
Suzuki also sold the A-star in Europe (known as Alto in those markets) at a cheaper price than the Pixo. At the same time, Nissan was phasing out the Micra hatchback and replacing it with a new model. The Pixo ensured Nissan's presence in the mini car segment.
However, after a gradual withdrawal of the scrappage incentive scheme, continued subdued market conditions and a vehicle recall by Suzuki to rectify a technical problem, Nissan orders for the Pixo dropped to 10,000 units last year.
While Nissan had prepared to launch the all-new Micra in Europe, simultaneously, it also began work on a Pixo replacement, with development work going on in China and India. For India, the company altered its strategy and introduced the Datsun brand (in the low-cost segment), instead of launching anything below the Micra under its own brand.
Though such a manufacturing contract between rival companies may be new in India, both Nissan and Suzuki have had such contracts in the past in Japan.
In India, the A-star would see a new version, expected to be launched soon.