India: Mahindra & Mahindra open to alliances; Renault JV plans announced
Friday, December 07, 2007, AutomotiveWorld.com
Mahindra & Mahindra has announced that it is open to technology or function-specific alliances in both the passenger and commercial vehicle segments, in line with its strategy to expand its presence globally, The Economic Times reports. The OEM has said, however, that it is not interested in broad spectrum tie-ups.
"The partnership contract between Renault and Mahindra & Mahindra is clear and well-defined. Both of us are free to hook up with other companies and do what makes sense for our business. The only defining clause is that neither can get into a segment that competes against the Logan," the Indian business daily quotes Pawan Goenka, president of Mahindra's automotive sector as saying.
In the case of passenger vehicles, future alliances are likely to be technology oriented. According to the OEM, companies that do not have their own diesel engines have approached Mahindra for its indigenously-developed units.
The firm has a new engine range in place, which includes the mHawk, which already features in a recently launched version of the Scorpio SUV. One of the units from this range will also feature in the Ingenio minivan, to be launched in mid-2008.
Mahindra & Mahindra's commercial vehicles agreement with Navistar is, however, exclusive and hence the OEM cannot enter into further alliances. However, Mahindra International, the joint venture between Mahindra & Mahindra, and International Truck & Engine, can enter into other alliances, as long as it does not involve any of Navistar's competitors, the report says.
"Once our new line-up of trucks is ready for marketing outside India, we may have some alliances in place. We would look at global automotive companies with good brand, strong network but no products in the category where our models will be positioned," The Economic Times quotes Goenka as saying.
At present, the OEM has a joint venture agreement with Renault for the Logan range. Variants from the Logan platform, such as the Logan wagon (R90) and the Sandero hatchback (B90) will likely be assembled at the OEM's facilities in Nasik, western India, and Chennai, southern India, respectively.
"The business case [for the R90 and B90] has not yet been done but it is happening. Nasik's 4000 units-per-month capacity includes the Logan wagon. We will take a call on the R90 any time now, and it will take another 18 months to roll it out," Goenka says.
The Logan sedan which is currently on sale in India carries a base price tag of Rs445,000 (US$11,300), rising to Rs480,000.
Mahindra says it is holding talks with Renault to launch the Scorpio through its global network, in two select overseas markets. Should the talks prove successful, the Scorpio SUV will be produced at Renault facilities, and distributed through its dealerships. The final decision on this is expected within the next four months, the report says.
According to Goenka, Renault's powertrain subsidiary in Chennai will be at full production when volumes reach 100,000 to 150,000 units.
Published on Friday, December 07, 2007
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