The long standing tussle between Renault and Mahindra&Mahindra over the structuring of Logan has come to a cementing stage. The French company is agreed upon the restructuring, as desired and insisted by M&M, to reduce the size of the car and certain other modifications. The need is for availing the benefits of excise duty and M&M thinks the reduced price of the car may yield more number of sale volume. The sale of this Logan has seen the dip by 60%(4982 units) during April2009 and February 2010 amidst the growth rate of 26% in the Indian car market.
The final proposal about this will be publicized after April 5, said the official source from the JV. Under the JV effected from 2005, Renault holds 49% while M&M retains 51% stake. The President of Mahindra automotive business disclosed that the official information about the deal would be available in another 10 days. Till now, Logan is sold as the low cost fuel efficient sedan and the restructuring will further reduce the cost.
According to the tax reduction mooted by the government of India, cars within 4.0 metres long and with 1.2 lit gasoline / 1.5 lit diesel are eligible for relaxation in excise duty upto 10%. For cars with more than this specifications, the excise duty applicable is 22%. Logan is currently dealt by M&M in 1.4 gasoline and 1.6 lit diesel engines at the length of 4.2 metres.