Mahindra & Mahindra and Renault have set up a joint venture to manufacture the Logan in India.
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The agreement provides for the manufacture and sale of the new car in India from 2007.
The estimated capital expenditure is €125 million for a production capacity of 50,000 cars per year.
The two groups have concluded a framework agreement for a joint venture with Mahindra taking a 51% share and Renault 49%.
The JV, to be called Mahindra Renault Ltd, will commence production during the first half of 2007 in a state-of-the-art factory with body stamping shop, paint shop and final assembly line designed specifically for the Logan.
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By GlobalData“The quality of Indian parts manufacturers and the presence of a number of international suppliers in India will allow [local content of] 50% from the beginning of the project,” the two automakers said in a statement.
Renault and Mahindra will develop right hand drive Logan models will “to meet the needs of Indian and other right-hand drive markets,” the companies said.
In India the Logan will be marketed with Mahindra Renault namplates and will be sold through the Mahindra & Mahindra dealer network.
The agreement willl see Mahindra & Mahindra, the fourth largest Indian vehicle maker and a specialist in utility vehicles extend its range to passenger cars, a particularly strong growth segment in India.
The company is the market leader for SUVs in India, taking a 49% share of the ‘UV’, or utility vehicle segment in 2004.
Anand Mahindra, vice chairman and managing director at Mahindra & Mahindra, said: “The objective of setting up the joint venture company is to bring Logan, the popular global car, into India. The customer research conducted in India on the Logan has indicated an excellent response. The market is excited about the world’s best value C-segment car being launched in India”.
For Renault, entering the Indian market, where European manufacturers, except for Fiat and Skoda, have little presence, constitutes a major step in its international development. Including India, the Logan will be produced in six countries along with the projects already launched or decided: Romania, Russia, Morocco, Colombia and Iran.
“I am happy with this agreement which allows Renault to establish a long-term partnership with Mahindra & Mahindra. This project registers with our strategy of international development in new car markets”, said Louis Schweitzer, chairman and CEO of Renault.
