Mahindra Logan still sailing even after the partnership was called off

In 2005, Mahindra & Mahindra signed a partnership with Renault for manufacturing of Mahindra Logan, the mid sized saloon for the Indian auto market. The joint venture between the Indian manufacturers and Renault was 51:40 in India. Mahindra Logan, the sedan entered the Indian auto market in April, 2007. But unfortunately the vehicle could not survive the competition in the domestic auto market against the well established Maruti Swift Dzire, Honda City, and the likes. In the partnership agreement, the company set the sales targeted sales of 30,000 units every year. But the sedan could not put up impressive sales figures which was only 500 sedans rolled out in a month. But the real drop was accounted in the sale of December 2009 when only 272 cars were rolled out. The association faced a loss of whopping Rs 490 crore by the end of the fiscal year (31st March, 2009).

As per the industry sources, it was said that, the two auto majors were contradictory over the sedan's design and the engineering. Mahindra & Mahindra India, wanted that the sedan should be revamped as per the Indian standards. But Renault, wished to purse with the original technology and design. In April, 2010, Renault brought back the 49 per cent share from the Mahindra Renault Pvt Ltd., and have made it 100 per cent subsidiary. However, Renault will continue its support with M&M and also the product via the license agreement and by supplying the key parts which includes the transmission and engine.

Mahindra, the auto maker said that, after the company will take over Renault's share, it will work on the three-pronged strategy and bring the sedan, Mahindra Logan back in the Indian auto market. Rajesh Jejurikar, the Chief Executive Officer in the Automotive Department at Mahindra India, said that, the Indian auto majors would rapidly take steps to redesign the Mahindra Logan and will trim on the car's shipped components which at present is 60 per cent and also will cut the length of the car to enjoy the excise duty benefits. On the contrary, the sales of Mahindra Logan has been improved after the partnership was discontinued.

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