INDIA: New twist in Renault $3,000 car plan

By just-auto.com editorial team | 13 July 2007

Renault's involvement in the fast-growing Indian passenger car market is getting complicated.

Renault, already building a plant with Mahindra and Mahindra, will now meet with Bajaj Auto managing director Rajiv Bajaj in Paris shortly to discuss a possible partnership to build a $US3,000 car, the Economic Times of India reported on Friday.

The paper said the small car deal could herald a larger alliance covering commercial vehicles as well.

Coincidentally, rival Tata Motors has just launched a passenger van line called Winger based on a previous-generation Renault model.

The Economic Times of India said initial discussions had already begun though Bajaj refused to comment.

Ghosn has previously announced development of a $3000 small car which would be positioned below the Logan with an unspecified Indian partner.

The country's motor industry is already well-experienced with small cars and is an 'export hub' for Hyundai and Suzuki models.

Mahindra Renault, a largely marketing company, is in charge of selling the global low-cost Logan sedan in India, the paper noted.

Mahindra, Nissan and Renault are building a 'green field' plant in Chennai which will build vehicles for all three brands while Renault is also installing a powertrain plant in India as a 100% subsidiary.

Mahindra vice chairman Anand Mahindra declined to comment to the Economic Times of India on whether Renault was talking to Bajaj Auto but emphatically denied there were any talks with its French partner on the small car project. "We have had no discussions with Renault on the small car project," Mahindra was quoted as saying.

Sources have told the paper M&M is not interested in the $3000 car project because it's long-term strategy is to be a global player in the SUV market.

"The $3000 project would not be within M&M's core competence and would not bring in the kind of margins which would make the project attractive given the size of the investment required," a senior industry source told the newspaper.

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