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Mahindra bids Renault goodbye

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The much awaited decision of Mahindra Renault Private Limited has finally been chalked out. Mahindra & Mahindra will buy out the 49 per cent stake in Mahindra Renault Private Limited to make it a 100 per cent subsidiary of Mahindra Automotive. Renault will retire its debt in the joint venture by itself.

In return, Mahindra will continue to manufacture the Logan and a sub 4-metre version of the car according to a new agreement. If you will remember, we had broken the news about the existence of a sub 4-metre Logan and even carried the first pictures on our website. You can find the link at the end of this story.

Renault will receive royalty for each car sold in the process. This is a small fee that will be worked out as a percentage of the value of each car sold. Meanwhile, Mahindra automotive is also working on another agreement with Renault to use the Logan platform, most likely for its own small sub four-metre SUV platform. Mahindra is planning to develop such an SUV for the Indian market and select export markets for launch by late-2012.

The Renault association will be used on the car until the end of this year, while Mahindra will rename the product 18 months from now. The Logan's entry into India in 2007 marked the entry of Renault as well. The car did well initially with sales touching 3000 units a month at one point. But within months sales start to slip and as of now it averages nearly 300 units a month. The reasons for the car's sales decline vary from the way the car looks to its price-tag in the face of competition from Maruti Suzuki's Dzire and Tata Motors Indigo Manza to the uncertainty surrounding the JV over the last year-and-a-half.

The Logan will continue to be built at Mahindra's Nasik plant and will be serviced by the set of dealers who are currently appointed as MRPL dealers. Watch out for more updates.

ORIGINAL LOGAN COMPACT STORY: http://bsmotoring.com/storypage.php?autono=1857

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