Renault gives Indian partnership second chance

Mahindra Logan - IndiaRenault is planning to give its partnership with Mahindra & Mahindra in India a second change. The sale of Logan that was expected to be around 50,000 units in a year is way below the target. The problem in partnership has resulted in reduced production which is just 500 units per month. Analysts believe that Renault has underestimated the Indian Consumer who was not impressed by the spec and look of Logan. This resulted in lower sales that affected the profitability of the joint venture. Soon the company started losing money which created a dent in their relations. So when Renault announced its partnership which Bajaj everyone predicted the end on the company’s JV with Mahindra & Mahindra.

However, according to sources close to the company both companies are planning to announce a restructuring plan that could help in avoiding their divorce. The Logan is set to be re-launched as a small car in India. The length of the car is likely to be less than 4 meters. Since the size of the car is small it will attract lower excise duty of 10 per cent. Also the engine capacity is likely to be reduced to 1.2 litres from 1.4 and 1.6 litres. This will reduce the price of the Logan and help in making it competitive.

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