Mahindra & Mahindra Ltd (M&M) yesterday announced a 51:49 joint venture
with Renault, to produce and sell their car, Logan, in India. Discussions
are also on between the two parties to sell M&M SUVs abroad through the
Renault''s distribution channel.
a press conference, Anand Mahindra, vice-chairman and managing director, M&M,
said the company''s focus continues to be its SUV business. The arrangement
with Renault is for a specific product, due for rollout here in the first
half of 2007. "This is a single product alliance for making the Logan.
That''s it," said Alan Durante, executive director, M&M.
Logan, an entry-level C segment car with its production hub currently in Romania,
is being primed for a global production figure of 600,000 units in the next
Asia, Iran is set to host a 300,000 unit-strong capacity for the car by 2006.
It compares with Mahindra-Renault''s 50,000 units.
Logan''s multi-location manufacture (in Romania, Russia, Morocco, Columbia,
Iran and India) should help tackle the problem of a strong euro as production
bases outside can be tapped for component sourcing, Bharat Doshi, executive
director, M&M, said. The car is expected to host 55-60 per cent local
content within two years of launch. Renault will examine parts distribution
Rs 700-crore joint venture (investment will be a mix of equity and debt) with
M&M as majority partner is different from its earlier a 50:50 partnership
with Ford, Mahindra said. Ford India Ltd (FIL), where M&M''s equity stake
is now 15 per cent..
the new venture, M&M will additionally handle finance and distribution.
Renault will be responsible for purchase, engineering and quality. The Indian
company will have four board members to Renault''s three, and will appoint
the managing director, while the overseas firm will appoint the non-executive
chairman. While Ford still has a 5 per cent equity stake in M&M, there
is no proposal for Renault to do a similar take.
Logan will be manufactured for a fee at M&M''s Nashik, Zaheerabad
or Haridwar facility and sold under the Mahindra-Renault brand. Similar clarity
on branding for M&M vehicles likely to sell through Renault''s channels
could not be had.