Renault exits Mahindra JV

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SummaryRenault is saying it will market the Logan on its own after the new deal.

Renault exits from Logan JV, M&M gets licence

New Delhi, Apr 16 (PTI)

Ending months of differences over production of entry-level sedan Logan in India, French auto major Renault today announced its exit from the joint venture with Mahindra & Mahindra.

Paying back in the same currency to its Indian partner, who had in 2008 walked out of a Rs 4,000-crore tripartite manufacturing joint venture in Chennai, Renault said it would sell its 49 per cent stake in Mahindra Renault Pvt Ltd to M&M but did not give the valuation.

The French auto major, however, said it will continue to support M&M and Logan through a licence agreement and supply key components, including the engine and transmission.

The licensing agreement will, however, not cover other vehicles built on the Logan platform such as the Sandero.

"Renault is fully committed to the success of Logan in India. We will continue to extend support to Mahindra to help in gain market share," Renault Executive Vice-President Asia and Africa Katsumi Nakamura said.

The two companies said they have restructured their partnership, under which Mahindra Renault Pvt Ltd will become a 100 per cent subsidiary of M&M.

Post the restructuring, M&M will be responsible for the management of the Logan in Indian market but the Renault name and logo will continue to be used till the end of this year, the two companies said in a joint statement.

After 18 months, the car will be renamed and will sport only the Mahindra logo it added.

"The new agreement between Mahindra and Renault will give us the opportunity to chart out a new strategy to help drive the Logan brand in India, which will also include engineering changes, keeping in with customer requirements," M&M President Automotive Pawan Goenka said.

A senior Renault India official said after the new agreement, Renault will not sell the Logan on its own in future in India.

Mahindra Renault Pvt Ltd, formed in 2005, ran into troubles when Logan sales failed to meet expectations.

Launched in 2007, Logan could not make the mark in the Indian market, selling just over 44,000 units since launch.

Last fiscal Logan sales dwindled to just 5,332 units from 13,423 in the previous financial year. M&M had wanted to cut the size of Logan to make it qualify for small car definition and get excise benefit but Renault was against changing spec of the car.

The partners had envisaged an investment of Rs 700 crore to produce 50,000 units

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