Mahindra Renault Logan Club Forum and Blog - ClubLogan

Mahindra & Mahindra
(M&M) is gearing up for a big push in the passenger car market with Renault.
The homegrown auto major has made a proposal to the French company for joint
badging and distribution of new cars that roll out from the Chennai factory, in
a bid to expand relationship with Renault beyond the no-frills sedan Logan. The
Chennai facility is scheduled to start production from 2010.


The
joint initiative can increase M&M’s offerings and stake in the fast-growing
domestic car market, while providing the Carlos Ghosn-led auto major a strong
partner for next phase of growth in India.

“We are working on how to
take the relationship forward. The attempt is to see whether Mahindra’s joint
venture with Renault could be the distribution channel for all of Renault
products in India… We are talking to Renault very seriously right now,” Pawan
Goenka, president of Mahindra’s automotive business, told TOI. A distribution
agreement is also expected to lead to joint badging, cars sporting both Renault
and Mahindra brand names.

When contacted, a spokesperson for Renault
confirmed the development. “We are having discussions with the Mahindra group
and these could further enhance our existing relationship. While our current
tie-up is for production and distribution of Logan, we are looking at expanding
the scope to include distribution of Renault cars through Mahindra-Renault joint
venture,” he said, adding that joint badging was the “stated intention” in the
discussions andMahindras brought in a good distribution reach for the company.

While M&M is a leading utility vehicle player with Scorpio, it
has decided not to get into the highly-competitive passenger car business on its
own. It entered the segment with Logan. And if Renault extends this to more
products, Mahindra could be a serious player in this area.

The French
company plans to roll out four new cars from its Chennai factory, including
small and big ones. It has plans to create a capacity of 200,000 units for
Renault cars, while a similar amount will be produced by group company Nissan,
which has tied up with Hover Automotive India for marketing, sales, after-sales
service and dealer develoment.

After initially being part of Renault
and Nissan’s Chennai car plant, M&M had earlier this year decided to part
ways. Asked what the reasons behind the move were, Goenka said there were no
differences between the three companies.

“We did not have a joint
venture that we walked out of. We did not sign a joint venture. Clearly, if we
walked out in disagreement, we would not talk today of joint distribution.

So, it was a mutually-agreed deal that we will not be part of
production.”

Goenka said a final decision on the discussions would
not be far. “It should happen soon. Maybe, a couple of months and not a year.
Remember, the products are coming out from mid-2010.”

Source : The Tmes of India, “M&M pans a Drive in the Fast Lane“