The fate of Mahindra Renault Pvt Ltd (MRPL), a joint venture between Mahindra & Mahindra (M&M) and French automaker Renault, is expected to shape up in the first week of April with both companies looking at restructuring the loss-making JV.
A spokesperson from Renault told FE, ?We have reached an agreement on almost all major issues.? He added that the details of the same are expected to be made public in the first week of April.
However, Rajesh Jejurikar (chief of operations, automotive sector) of M&M, said, ?The talks are still on and nothing has been finalised yet.? The two companies had said they will be coming out with a final word on the future of the sole JV product, Logan, and the JV itself in a month?s time.
This comes at a time when Renault is all set to enter the market with new products – Fluence, a sedan, and a crossover (sports utility vehicle) Koleos by 2011 in the Indian market, and has opened a manufacturing plant with its alliance partner Nissan. The French car maker has also announced recently the setting up of its own dealerships in the country.
As reported by FE earlier, M&M may look at reducing its stake in the JV and give a go-ahead to Renault with controlling stake. Currently, M&M holds 51% in the JV and the rest is held by Renault. In the two financial years, FY08 and FY09, the JV has made a two-year consolidate loss of Rs 580 crore. By the end of this financial year (FY10), the losses are expected to be around Rs 700 crore. According to M&M?s FY09 annual report, its investment in the JV was Rs 154 crore.