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After weeks of speculation, there is finally an end to the whole Mahindra-Renault saga. Renault will exit the JV, Mahindra will continue to manufacture and sell the Logan for a royalty fee and the French company will concentrate its efforts towards setting up its manufacturing in Chennai with Nissan and a sales and after-sales network. There is an air of amicability around the whole episode and more than anything, dealers can now heave a sigh of relief and push the Logan with renewed energy. While Anand Mahindra continues to maintain that despite the takeover, the company's focus is still UVs, I somehow don't think it's quite possible.
If you will notice, 2010 is a defining year in the Indian auto industry, more so than some of the previous years. With consolidation and new products from existing manufacturers, there will be a whole bunch of them who will finish FY 2010-11 with sales figures in the six-digit arena. Some of them like GM and Ford will be doing so for the first time in 15 years while others like VW and Nissan with their minimal presence could be looking at a 10 to 50 jump fold from their existing situation. Then, Toyota and Honda are expected to join the bandwagon and in this melee it is quite likely that M&M's will not want to be left out in the passenger car/vehicle space.
India is at the cusp of now heading on the same growth path as China's auto industry, of course if financial, macro-economic and other factors don't play spoilsport. And everyone would want a pie of it. To stick to the stance that UVs will continue to be their core is somewhat sensible but somewhat foolhardy too. What I'd really like to see is M&M complete their transportation circle. They moved into two wheelers, commercial vehicles and even aircraft and boats in the recent years! The latter two have tremendous growth potential, two-wheeler business requires marketing acumen and commercial vehicles is as tempestous an industry as has ever been. So to say M&M wants to mitigate its risk and therefore not take major steps into the passenger car arena may just end up becoming a boat they might not want to miss.
They have the right product to begin with in the form of the Logan, have acquired the expertise and engineering skills from former partner Ford and now Renault and with some external help thrown in can really start manufacturing India-centric cars. It's good to know that the platform could spawn a compact Logan and an SUV, but M&M would be better off by looking at more avenues. I'd really like to see M&M bring a proper hatch with nice styling cues in the next two years or so, something in the Rs 3.8-5 lakh bracket. I'd also like to see a second generation Logan along with it and maybe even feature a sportier version with about 100-115 bhp, stiffened suspension, a quicker turning steering and some nice body-kit to complement it. I'd also like to see Mahindra finally shed its image of being just a UV maker and don the suit of one that can also make world class cars. Because if Mahindra can spread themselves across sectors and do a good job of it, am sure it won't be all that difficult to make and sell a serious number of cars every year now, can't it?
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