Mahindra and Renault today announced the restructuring plans for their 51:49 JV, Mahindra Renault Pvt Ltd, through which the Logan car is manufactured.
As per the agreement, the parties have in principle agreed that 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. As previously stated by leaders of both companies, the aim of the restructuring is to ensure continuity and build on the positive customer equity that exists for the Logan in India.
â€œRenault 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,â€ said Nakamura, EVP, Asia-Africa for Renault. He added, â€œWe 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.â€
â€œThe 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,â€ said Dr. Pawan Goenka, president, Automotive & Farm Equipment Sectors, Mahindra & Mahindra.
Key features of the restructuring are:
- Mahindra & Mahindra (M&M) will buy Renaultâ€™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
- The Renault name and logo will continue to be used on the Logan till the end of thisÂ calendar year
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
- Create a refresh and other modifications in line with customer expectations
- Execute additional localisation to reduce costs
- Other vehicles built on the Logan platform by Renault globally, such as the Sandero, are not included in this new agreement.
- M&M and Renault will continue to work together on an ongoing basis to explore areas of synergy for mutual benefit on several fronts.