Breaking the silence over Mahindra & Mahindra?s exit from a joint venture with Nissan Motor Co and Renault for a manufacturing plant at Orgadam, Renault India?s MD, Sylvain Bilaine, has rubbished reports that M&M exited from the project because Renault and Nissan had multiple JVs in the country including plans for a small car with Bajaj Auto.
Bilaine told FE that the exit did not happen suddenly. ?Earlier we were just looking at the big picture and the tall numbers. In due course, M&M realised that if they use their existing plants, it will work out much cheaper for them,?? he said.
According to him, the Indian auto major walked out of the project because there weren?t any synergies between the partners. “When we did the detailed study of the specific models of M&M and Nissan (to be manufactured in the plant) we didn’t find the right synergies as far as volumes and technology requirements of the partners is concerned,” he said. On Tuesday, M&M had informed the BSE that it has deferred its plan to partner with Renault and Nissan in the proposed $1 billion manufacturing plant for which it had signed an MoU in February last year.
The plant was proposed to manufacture cars, utility vehicles and also power trains for Renault and Nissan and was supposed to commence production from 2009. However, Bilaine said that now they won?t be able to meet the deadline. ?Discussions with the Tamil Nadu government about land acquisition are still on. All depends on that. So, the second half of 2009 deadline for the roll out is difficult to meet now,? he said.
In the Orgadam plant, Renault and Nissan were supposed to pitch in 25% each while M&M was contributing half the share of the investment. After M&M?s withdrawal, the two remaining players will share the investment in the plant equally.
Affirming the statement earlier made by M&M that the fall-out would not affect Mahindra and Renault?s other joint ventures in the country, Bilaine said that Mahindra has only existed the manufacturing joint venture ?which means that Mahindra cars would not come of the Orgadam plant. Rest everything remains the same, including the JV for Logan and M&M marketing our products in the country.? However, he also added, ?After M&M’s exit it would be an altogether different ball game.?
Bilaine added that there was a sense of personal disappointment at M&M?s move but there was no bitterness. Talking about the small car project with Bajaj Auto, Bilaine said that a feasibility study is being carried out and they expect to reach a decision in the next couple of weeks/months.