Mahindra-Renault tussle comes to an end

After months of issues and confusion auto majors Renault and Mahindra & Mahindra have come to a conclusion regarding the production of entry-level sedan Logan in India. The French auto major Renault has decided to exit the joint venture with Mahindra&Mahindra.

This is being seen as a second chance for the entry level sedan Logan. Under the terms of the partnership Mahindra Renault Pvt Ltd will become a 100 per cent subsidiary of M&M. Now M&M would be responsible for the management of the Logan in India and the Renault name and logo would be used for this year. Renault will not sell the Logan on its own in future in India.

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 would still continue to support M&M and Logan through a licence agreement and would supply key components, including the engine and transmission. 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.

But this is not going to be the case for Sandero. The licensing agreement would not cover Sandero and other vehicles built on the Logan platform. After 18 months, the car will be renamed and will sport only the Mahindra logo it added.

This new agreement would give Mahindra an opportunity to make new strategy to make the Logan brand a success in India. Mahindra would make some engineering changes keeping the customers requirements in mind. Logan sold just over 44,000 units since launch in 2007. Last fiscal Logan sold just 5,332 units from 13,423 in the previous financial year.