Auto News

Renault not to end tie-up with Mahindra & Mahindra

By Motortrend India Staff   |   17 March,2010

French auto major Renault on Wednesday said it was not going to end tie-up with Mahindra & Mahindra over their joint venture that sells Logan, stressing that the car will continue to ply on the Indian roads. The company said that it will announce details of reworked pact with M&M by April.

Mahindra Renault Pvt Ltd, the joint venture in which the French automaker holds 49 per cent, has been struggling to sell Logan with sales declining to just 4,981 units in April- February 2009-10, down 60.03 per cent from the year-ago period.

While M&M wants to tweak the specifications of Logan to make it smaller in order to qualify for excise benefits on small cars, Renault has been against it thereby putting strain on their partnership.

“We are discussing (with M&M) how to reposition the car and how to simplify the organisation and it looks like we need to be more nimble and little fast with the market,” Renault Chairman and Chief Executive Officer Carlos Ghosn said.

He said so far the conclusion has not been drawn. “The day we reach a conclusion we will communicate with is too early to talk to you on what decision will be taken.”

On the poor sales performance of Logan, Ghosn said: “We are obviously not very satisfied with the evolution of sales of Logan and we have shared it with M&M.”

He, however, reiterated that despite the differences with M&M, the Logan will stay in Indian market. “Consumers will enjoy the product and continue to enjoy the services around the product and this is something we agree without any doubt with our partners. We will continue to work to make Logan competitive,” he added.

On the small car, Renault said that it will announce the plans later.