Renault and Nissan are setting up a joint venture with India's Mahindra & Mahindra to build a new $900m (£458m) car plant in the city of Madras (Chennai). Mahindra, India's fourth-largest car firm, will own 50% of the venture with its partners controlling the rest. Production is expected to start in 2009 with the target of producing 400,000 cars a year.
Foreign firms are flocking to India because of the economy's strong growth and low costs. With Ford and Hyundai having already opened plants in Madras (Chennai).