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Mumbai: French auto major Renault on Wednesday hinted that not all was well with one of its Indian joint venture (JV) partnerships. The company markets the entry-level sedan, Logan, though a JV with Mahindra & Mahindra (M&M), and declining sales of the car has put a question mark over the future of the JV, Mahindra Renault, in which the French firm has a 49% stake.
While the entire auto industry in India has been in a tailspin in the last one year — sales have picked up over the last three months though — Logan has been among the brands that have failed to live up to the early expectations. In September, 510 units of the car were sold compared to 1,752 units in the same month last year. In the first six months of this financial year, the JV sold 2,901 units of Logan compared to 9,217 units in the same period last year.
Renault has other alliances with Bajaj Auto for a small car project and Ashok Leyland, through Nissan, for light commercial vehicles in India. The company has put on hold some of its plans in India including investment in the Chennai plant. Renault said if things do not work out, it can sever ties and may even drive in its new product into India with a different partner. "I am not saying we will, I am saying we can," Renault chairman and CEO Carlos Ghosn said at the Tokyo Motor Show. "I don't want anybody to be surprised. We have three partners (in India). Our intention is to continue with the three partners, but if that is not possible, I can tell you we need at least one." He was responding to a query if Renault was unhappy with any of its Indian partners, particularly with M&M, following the dismal performance of the Logan in India.
Indicating that Renault can always bank on Nissan as an alliance partner, Kiminobu Tokuyama, managing director and chief executive officer, Nissan Motors India, said, “If Renault needs help in India, we are there.” In an earlier conversation with FE, Tokuyama had made clear the company's intention to back Renault if things go wrong with M&M. In fact, a key intent of the Renault-Nissan alliance is to complement each other in markets the two partners roll in. “Renault has a stronghold in Europe, while Nissan is big in Asia. They help each other...
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