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M&M, Renault joint venture to be revamped

February 10, 2010 10:18 IST

Mahindra LoganPromoters of the loss-making Indo-French company Mahindra Renault said it had finalised a new roadmap for the troubled venture that makes the Logan sedan, the details of which will be made public in 30-45 days.

This announcement was made on Tuesday by Renault India executives on the sidelines of an event, where their independent product roll-out plan for India backed by an equally independent distribution and marketing set-up was discussed.

Marc Nassif, country general manager and managing director, Renault India, said, "We will come out with a new business model. In a month or month and a half we will announce our new plans for the joint venture. We had been in advanced stages of discussions with Mahindra & Mahindra (M&M) on how to go forward (with the venture)."

However, when asked to elaborate on the measures that the JV company was exploring, Nassif declined to comment further.

The 51:49 JV, owned by M&M and Renault in that order, manufactures the Logan, a mid-sized sedan from a facility based in Nashik. 

The restructured business model will ideally look to tide over the current loss in business, which both the companies have been experiencing (especially Renault), over the past few years in terms of mounting losses and eroding brand value.

In an attempt to reverse the damage to its brand, Renault has decided to introduce more vehicles in India, including a premium sports utility vehicle and a sedan next year, which will be sold through a network of dealers appointed exclusively by Renault.

The Logan, however, is currently sold through a network of dealers put in place by M&M.

Meanwhile, a statement from M&M said, "The Logan has very satisfied customers and enjoys a strong equity. We are confident that the Logan will be in the market and continue to sell through its current network. Mahindra and Renault will continue to work together in a positive and synergistic manner."

Image: Nalin Mehta, COO, Mahindra Renault and Kunal Kapoor at the launch of the Special Edition Logan Edge.

BS Reporter in Mumbai
Source: source image