Renault and Mahindra to restructure their joint venture

Article by Christian A., on August 29, 2010

Within 30 to 45 days, we will know if negotiations between Renault and its Indian partner, Mahindra & Mahindra, about restructuring their joint venture, are successful. Renault revealed plans to set up its own dealer network in India.

Country head Marc Nassif said that it wants to start with 15 dealerships by mid-2011, and in the next 30 months, increase the number to 150.

Nassif said that it's never too late to come to India as its market is expected to triple in the next 10 years. Despite a good start in India, sales of the Logan have dropped considerably since 2008.

The reason being pointed at is pricing; since it's more than 4 meters in length, the Logan has a factory gate duty of 20%. As a result, it becomes too expensive for its target segment.

Renault India's Chief Operating Officer Sudhir Rao said that various options are being considered for the joint venture MRPL (Mahindra Renault Pvt Ltd) as a business and Logan as a product.

Roa divulged that Renault is confident about arriving at a positive solution for both firms. He declined however to say what form the restructuring would take.

The joint venture has about 110 dealers across India. Renault owns 44% of Japan's Nissan Motor Co., and the two firms plan to build an ultra low-cost car in India in partnership with motor bike maker Bajaj Auto, with a launch expected in 2012.

The Renault-Nissan alliance will pour in 45 billion rupees ($974.03 billion) spread out over seven years to build a plant in Chennai, southern India, which will have an annual production capacity of 400,000 units.

If you liked the article, share on:

Comments

Recommended

It has been nearly eight years since Toyota entered a new era of sports cars when it officially unveiled the production version of the Toyota 86 – also known as...
by - February 27, 2019
The new Audi TT RS – yes, the top version of the German carmaker’s facelifted TT model series – is now officially here. If you could remember, the range-topping TT...
by - February 18, 2019
Nearly half a year ago when McLaren Automotive unveiled the McLaren 600LT Coupe, the British carmaker is now introducing a version that lets its passengers enjoy the thrill of an...
by - January 25, 2019
German carmaker Volkswagen is now making the latest evolution of the new Volkswagen Golf GTI -- the new Golf GTI TCR. First unveiled as a concept at the annual GTI...
by - January 24, 2019
It has been three and a half years since BMW unveiled the sixth generation of the BMW 7 Series. Thus, it is really about to give the 7 Series a...
by - January 17, 2019