Report: Renault-Nissan Halts India Investment in Dispute

The Renault-Nissan Alliance has suspended plans to spend 50 billion rupees ($754 million) on its factory in Chennai, India, according to the Hindustan Times.

Renault and Nissan claim they are owed 46 billion rupees ($693 million) from the state government of Tamil Nadu, in which the Chennai plant is located, for promised subsidies and tax refunds.

The newspaper cites a letter from the carmakers asking India's Dept. of Industrial Policy and Promotion in New Delhi for help in resolving the issue.

The Chennai factory employs some 8,000 people, including 1,200 temporary workers. Earlier this month the alliance said it intends to eliminate a few hundred jobs because delayed new-product launches have hurt demand for its products. The facility makes a variety of Nissan, Datsun and Renault brand small cars and SUVs.

The Chennai plant has the ability to make 400,000 vehicles per year, but it has been operating at only 70% of capacity.