In its vain to build a repute brand image in the Indian market, Renault had made a tie-up proposal with the local giants like Bajaj and M&M. But the momentum failed to gain as M&M is not in good spirit to go ahead. However, the fate played in a different way with Bajaj offering its bid to the French car maker. M&M is a joint seller for Renault’s Logan model in India. But nothing materialised so far putting the eggs in the froth. In the 51:49, both M&M and Renault were to go along in the car market, but problems persisted that Renault is in a position to approach Bajaj. The picture is still clumsy as all the companies – Renault, M&M and Bajaj- being tight-lipped about this tussle.
The marketing problem with Logan is its size, which led to 20%excise duty (cars beyond 4 meters length are liable for this excise duty and Renault refused to cut down the size). The past few months have been bad phase for Logan –just 500 vehicles in September (a dip of 71%) and its sale for the period from April-September hallowed to 2901 units, a figure telling hard story (last year’s sale was 9217 units in same period). Meanwhile, M&M is continuing its venture role amidst these speculations.
The JV between Mahindra and Renault took place some four years ago with an investment of Rs700crore. The initial plan was to deliver some 50000units of Logan from M&M’s Nashik plant. The tie-up immediately found similar one this time from Nissan entering into the picture with an investment of Rs4500 crore for a plant near Chennai. Then came the news about small car project in association with Bajaj. All put together Renault is not in a position to secure any prospects- its investment with Nissan lies idle, the project with Bajaj is in deadlock over branding, and the tripartite deal of Renault-Nissan-Bajaj is a never ending dispute.