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FRANCE/INDIA: Renault and Mahindra plan new car plant

By just-auto.com editorial team | 9 November 2006

Renault and Mahindra have signed a memorandum of understanding (MOU) to establish a long-term strategic partnership in India which will see the two automakers establish create a greenfield manufacturing facility within five years.

A range of Mahindra and Mahindra-Renault products suited to the requirements of Indian customers will be manufactured at the new site under the direction of Renault and Mahindra.

The facility will include a vehicle assembly plant, shared between the two partners, while Renault also plans a powertrain factory.

Production is expected to begin in mid-2009, with an initial installed production capacity of 300,000 vehicles per year. The location will be announced shortly.

This latest move is additional to the existing joint venture with Mahindra to build the entry-level Logan model in India from the first half of 2007.

Renault president & CEO Carlos Ghosn said: "I am delighted to announce the deepening and enlarging of our partnership with Mahindra in what I see as a great opportunity for Renault's development in India.

"This gearing up of our presence in one of the fastest growing markets in the world is key to our commitment to international growth."

M&M vice-chairman & managing director Anand Mahindra said: "The strengths of Mahindra and Renault will go a long way in making India a key global automotive market."

The product range will be marketed by Mahindra-Renault and sold through the Indian automaker's dealer network.

The two partners will optimise production costs through economies of scale thanks to joint investment in plant and infrastructure, as well as purchasing synergies.

Renault will contribute its expertise in engineering, manufacturing and adaptation to meet customer requirements, and Mahindra will contribute its understanding of the Indian market and supplier base.

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