Mahindra and Renault have finally chalked out future plans of their JV, Mahindra Renault Pvt Ltd. The partnering companies have restructured their relationship, with Mahindra – the 51% stake partner – buying Renault's 49% equity stake in MRPL, taking complete charge of the company.
However, Renault will continue to support M&M and supply key components including engine and transmission for the Logan, through a License Agreement. With the new structure, M&M will be responsible for the management of the Logan in the Indian market.
“The new agreement between Mahindra and Renault will give us the opportunity to chart out a new strategy to help drive the Logan brand,” said Pawan Goenka, president, M&M.
The Logan will continue to bear Renault name and logo till the end of this year, and over the transition period of 18 months, M&M will rename the car and would carry only the Indian company’s logo.
Mahindra also plans to refresh the product and bring in modifications that will be in line with customer expectations. A key modification would be to bring down the car's length to below four meters to enjoy excise benefits. Currently the car attracts an excise duty of 22 percent, however, if Mahindra manages to bring Logan’s overall length down to four meters, a lower excise duty of 10 percent will be levied.
The company is also looking at additional localisation of the car that will reduce costs, helping the car manufacturer price the Logan competitively.
Dipan Sur
Viraaj Bhatnagar
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