Carlos Ghosn admits to Renault-M&M diferences

Renowed CEO of French car maker Renault, Carlos Ghosn admitted to differences with its Indian partner Mahindra & Mahindra. The JV presently makes the Logan at its Nashik factory. Moreover, the two firms are looking at ways to make the Logan more appealing to Indian buyers. Renault must learn from Maruti and Honda if it wants to make excellent cars. Why Maruti and Honda?

While Honda has the brilliance in technology and design, Maruti shows the way in reliability and value for money. The Logan is neither exciting nor a brilliant piece of design. A facelift would evoke lukewarm response and we believe the right way out is to bring its price down and open it up to the taxi market.

Renault is in talks with partners on how to overcome the differences, he said. “But I don’t want you to think that this is something surprising. This is part of life.” “We are not saying that our partnerships are going exactly the way we want them to go,” Ghosn told reporters on the sidelines of the World Economic Forum’s India Economic Summit on Sunday.

“We are also discussing with our partner Mahindra what needs to be done to modify the product but we have the patience and the determination,” Ghosn said. “I never thought that coming to India, we are going to get everything right for the first time. Nobody gets it first time right in any country and particularly in a country with a long history and tradition like India. We are not naïve to think that whatever we undertake is going to be successful in the first time.”

Moreover, he had hinted at last month’s Tokyo Motor Show about the possibility that his companies may lose some of its partners in India. “I am not saying we will, I am saying we can. I don’t want anybody to be surprised. We have today three partners (in India). Our intention is to continue with the three partners, but if it is not possible, I can tell you that we need at least one,” Ghosn had said at the show.

M&M

M&M president (automotive sector) Pawan Goenka, when quizzed about any strain in the relationship, he politely diverted the question to Mr Ghosn. In the past Goenka has also said that they are in talks with Renault to introduce new models in the Indian market. So far, the joint venture partnership, Mahindra Renault Pvt. Ltd, is restricted to only the Logan.

The venture has been hit by the poor sales of the sedan and there has been intense speculation on its future. In the fiscal year ending 31 March, 2009 it made a loss of Rs490.21 crore. Sales stood at Rs741.17 crore.

At the time of the launch of Logan in 2007, the joint venture was targeting 50,000 units a year. The Logan sold 401 units in October this year compared to a 1000+ sales volume for the same month in 2008.

Source : Livemint