Mahindra and Mahindra’s joint venture Mahindra Renault, the maker of mid-size sedan, Logan is having only one product currently in its portfolio. The company is taking a relook at its current single-product portfolio due to a sharp fall in sales. Mahindra Renault JV ahs considered the options among them one is a makeover of its existing product Logan for which the JV will also see fund infusion from both equity partners.  

Currently, Logan sells 500 units a month, a sharp fall from 1,200 units till January this year. This mid-size sedan has once also reached peak sales of 2,200 units a month in the initial months following its launch in mid-2007. 

A person close to the department said that while it is not clear how much the two partners will invest — the two companies have so far invested about Rs 500 crore in the project - cash infusion is vital to maintain the company healthy. Pawan Goenka, the President, M&M (automotive) told, “There is no finality on new product plans for India. While we have realigned our production to market demands and cut targets for the current year, we are serious about the joint venture.” 

Marc Nassif, Renault India managing director expresses his views, “Our determination to succeed in the Indian market remains undiluted. Renault’s India operations cannot be seen independently of Renault’s global strategies, and in the current global economic downturn, we have had to take a very rational view of our investment decisions. Though our India plans may have slowed down a bit, our intent and determination to succeed is absolutely in place.” 

Renault is said to be giving the Logan a facelift and adapting the product to the new emission norms coming into effect in 2010 as part of a product revamp. Keshub Mahindra, the chairman, M&M accepted at the company’s recent annual general meeting that the joint venture was posting losses. In comparison to the loss of Rs 42.64 crore in the previous year, in the year 2008-09 (including a one-time write-off) the company is having a total net loss of Rs 490 crore. 

In the end of the year 2005, Mahindra did a joint venture with French car maker Renault to make the mid-sized sedan Logan to cash in on the growing demand for cars in the world’s second-fastest growing economy. 

Initially, Logan was going to be manufactured at M&M’s Nashik facility and subsequent new launches would be manufactured at their new Chennai facility in India, while the distribution work would have been carried out by M&M. But due to the recent slowdown JV has to defer investments in the Chennai units and to also go slow on new launches. Renault has taken a hit on profitability even all over the world.  Renault has seen a loss of E 2.71 billion (Rs 18,428 crore) for the first six months of 2009, against a net profit of E1.58 billion (Rs 10,744 crore) for the corresponding period.

Popular Mahindra Cars available in India:
Mahindra Renault Logan GL 1.4 (Petrol)
Mahindra Renault Logan GLE 1.4 (Petrol)
Mahindra Renault Logan GLX 1.6 (Petrol)
Mahindra Bolero DI (Diesel)
Mahindra Bolero SLE (Diesel)
Mahindra Scorpio 2.6 LX 7-seater (Diesel)
Mahindra Scorpio 2.6 LX 9-seater (Diesel)
Mahindra Xylo E2 (Diesel)
Mahindra Xylo E4 (Diesel)
Mahindra Xylo E6 (Diesel)
Mahindra Xylo E8 (Diesel)

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Posted by Naresh Koshti on 6 August, 2009 2:24:22 PM IST #