Mahindra and Renault announce restructuring of JV for manufacturing Logan
Written by Vijay   
Saturday, 17 April 2010
Mumbai: Mahindra and Renault today announced the restructuring plans for their 51:49 JV, Mahindra Renault Pvt Ltd, through which the Logan car is manufactured. A Framework Agreement was signed earlier this week by senior executives of both companies.

According to the agreement M&M will take over the operations of the company. Renault will continue to support M&M and the product through a License Agreement and supply of key components, including the engine and transmission. Mahindra & Mahindra (M&M) will buy Renault’s equity stake in MRPL resulting in MRPL becoming a 100% Mahindra group owned company.

M&M will be responsible for the management of the Logan in the Indian market. Over the course of a transition period of about 18 months, M&M will rename the car to a Mahindra owned brand name and the car shall then only display the Mahindra logo. The Renault name and logo will continue to be used on the Logan till the end of this calendar year.

Mahindra & Mahindra will execute additional localization to reduce costs and create a refresh and other modifications in line with customer expectations.

"The new agreement between Mahindra and Renault will give us the opportunity to chart out a new strategy to help drive the Logan brand in India which will also include engineering changes, in keeping with customer requirements," said Dr. Pawan Goenka, President, Automotive & Farm Equipment Sectors, Mahindra & Mahindra Ltd.

Other vehicles built on the Logan platform by Renault globally, such as the Sandero, are not included in this new agreement.

"Renault is fully committed to the success of the Logan in India where it has achieved a high level of customer satisfaction. We will continue to extend our support to Mahindra to help it gain market share," said Mr. Nakamura, EVP, Asia / Africa for Renault s.a.s. "We reiterate our long term commitment to India through the recent inauguration of our manufacturing facility in Chennai and our plan to launch a range of Renault cars between 2011 and 2015," he added.

Mahindra Renault Pvt. Ltd. was established as a 51:49 JV between M&M and Renault sas in 2005 to manufacture and sell the Logan car. The Logan is manufactured at Mahindra’s plant in Nashik and sold through more than 100 Mahindra dealer outlets around the country.

The Logan was commercially launched in the Indian market in July 2007 and has more than 44,000 customers in India today. More than 2,600 units have also been exported to South Africa and Nepal.

The leaders of both companies have stated that the aim of the restructuring is to ensure continuity and build on the positive customer equity that exists for the Logan in India.

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