Less than a week after utility and tractor major Mahindra & Mahindra (M&M) bought the entire equity of French partner Renault in their joint venture company, it today declared a steep reduction in prices of the Logan car.
The prices were cut by Rs 27,000-80,000 for the Bharat-III variant, while the reduction for the BS-IV version is in the range of Rs 24,000-65,000.
Despite the car having a very low localisation level of around 50 per cent, as the engine and transmission is imported into the country, M&M says the reduction has been a result of rationalisation efforts undertaken by the company at its plant in Nashik.
Rajesh Jejurikar, chief of operations, automotive division, said, “The rationalisation of the prices have been made so as to provide a better value proposition for our customers. We wanted to give the Logan a fresh momentum through a reduction in prices.”
The new prices would be effective from April 26. The company, along with Renault, had earlier introduced a discount scheme to the extent of Rs 50,000 on the car without much success. These new rates will not be in addition to the earlier rates.
The company dealers who are selling the Logan are currently carrying little inventory, stated a senior executive of the company. M&M will have to reimburse the difference in the amount which its dealers had paid to the company at the earlier rates.
With the downward revision, the company hopes there could be a subsequent increase in sales of the model, which has now gone down to 300-350 units a month.
M&M is also working on a shorter version of the Logan, that would be under four metres in length. This car could be launched after 18 months.
M&M agreed to buy out the 49 per cent stake held Renault in the JV company, Mahindra Renault (MRPL). Under the deal, the company will get the Logan car under its fold and is free to make engineering changes to it. M&M is also in talks with the French giant to make multiple use of the Logan platform for producing more models from it.