The
Sandero appears to fit perfectly in the scheme of things of both
companies in the current market situation. For Renault, it gives an
opportunity to enter the high potential small car market without any
fresh investment on their part. And for Mahindra, it marks an entry
into the small car market, something the company has so far avoided as
it focused only on the utility vehicle and SUV category.

    The
Sandero makes the task easier for the companies as it shares a number
of parts with the Logan, making the sourcing of components
cost effective. The car will be distributed from Mahindra’s existing
network that also sells the Logan. Currently, 140 dealerships sell the
Logan and the number is likely to be strengthened by 40 more points by
this year-end.

Source :- The Times Of India, Mumbai

“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“