Mahindra-Renault, the ambitious joint venture that manufactures the Logan sedan in India is heading towards a definite split. The two firms had plans to sell a minimum of 2000 Logans a month with more variants on the same platform to be added based on demand. The Logan MCV and Sandero hatchback were in the pipeline and not to mention even the Logan pickup. The key to these future plans was the success of the original model, the story of which we very well know. The JV hardly manages to sell 400 units of its Logan every month with competitors like the Swift Dzire and Indigo running away with sales of over 7000 and 4000 units per month respectively.

The ambitious JV seems to be coming to a climax. M&M has started calling back some of its top executives in the JV, a clear indication that the agreement with the French company could be nearing an end. Three M & M employees from the top brass have left the JV, namely Nalin Mehta, the CEO of Mahindra Renault who has been appointed the new chief operating officer of Mahindra Navistar — the JV with the US company which will roll out heavy trucks, Jyoti Malhotra, the head of sales, and K Ravi, who was in charge of services, have also returned to M&M. Mr Mehta’s appointment as the COO of Mahindra-Navistar was announced internally at the end of last week while Mr Malhotra and Mr Ravi returned earlier this year.

M&M’s spokeswoman said that it was the company’s policy to deploy key managers in different parts of the group. “In any scaled down activity, a realignment of business operations is imperative. it’s part of the M&M policy to look at frequent job rotations within the company and it’s part of the career planning.”  With no clear news from either side, we expect the inevitable to happen. Moreover Carlos Ghosn is a person who moves on if a project fails to take shape. M&M and Renault are expected to come out with their future plans later this month. The split is because the two companies have been unable to agree on product development, innovation and pricing.

Apart from the JV, Renault has announced the launch of its Fluence and Koleos under its own dealership network from 2011. Moreover, M&M is unhappy with the alliance as it wants a greater say in engineering decisions which Renault is against. The dealers too have been dissatisfied with the inability of the two partners to get along. So what is in store for Mahindra-Renault Private Limited? We expect the two to part ways quite soon with Renault taking over service and sales of its Logan once its network is up and running. The fate of the Logan depends on the outcome of the announcement.

Source

Enter your email address:

Subscribe in a reader