Japanese automobile major Nissan is planning to invest Rs 1,700 crore (Rs 17 billion) to set up a factory for Datsun range of low-cost small cars.
The factory is likely to come up beside the current Renault-Nissan factory at Oragadam, near Chennai, according to reports.
A Nissan India Spokesperson said, "We are considering the possibility of producing an entry-level model at the Renault-Nissan Alliance plant in Chennai but we cannot go into any further detail."
Government officials refused to comment.
The company has been planning to revive the brand and expects it to contribute to half its sales.
The facility is expected to manufacture 200,000 cars every year, from 2014, added reports.
The facility is also expected to serve the exports market. The brand is also expected to be launched in South Africa next year, other than the three countries the company had announced earlier.
Datsun, a local product with the assurance of a global brand, is developed just 30 km away from the facility (Nissan's manufacturing unit at Oragadam) and will be manufactured in India.
The product is targeted at high-growth markets of the developing nations.
The company earlier said that the vehicles will be sold in India, Indonesia, and Russia from 2014.
According to an announcement by Nissan Motor India in March, 2012, the Datsun brand will play an important part in 'Nissan Power 88,' a comprehensive, six-year business plan which would accelerate the company’s growth across new markets and segments.
The cars would be designed to meet distinct local customer needs, featuring the latest technology, and built locally.