Daily Chennai - Tamilnadu, India

The Mahindra & Mahindra-Renault partnership has more or less chosen Chennai for setting up a greenfield manufacturing facility that is scheduled to go onstream by 2009.

A memorandum of association with the Tamil Nadu government may be signed in the first half of March.

But Tamil Nadu industries secretary Shaktikanta Das said loose ends needed to be tied up before the deal can be finalised. “There are several open-ended issues that we need to sort out with them,” he told DNA Money.

The two auto majors have launched a joint venture company in India, Mahindra Renault, which plans to market diesel and petrol variants of mid-sized sedan Logan in the country. The car is expected to be launched here within the next few months.

The Chennai facility is expected to have an initial installed capacity of three lakh vehicles per year. Besides a vehicle assembly plant, the two partners are expected to put up a power train unit but it is not clear if this will also be housed in Chennai.

Then, whether Renualt’s partner company, Nissan, would be joining in to make it a three-way alliance (Mahindra, Renault and Nissan) for India is also unclear right now. Nissan had been in discussions with compatriot Suzuki for entering the Indian small car market but the talks did not fructify and three-way partnership is not being ruled out right now. If it does decide to jump on to the Mahindra-Renault bandwagon, Nissan’s small car may also roll out of Chennai. A final decision by Nissan is expected sometime next month.

But coming back to Logan, the car is expected to be aggressively priced to take on competition from the likes of Maruti Esteem, Chevrolet Aveo, Ford Ikon and Fiesta, Tata Indigo, Honda City and Hyundai Verna.

According to automobile industry experts, the Logan may be available with three different engine options and in as many as eleven variants. This car would be marketed by Mahindra-Renault and sold through the extensive M&M distribution network throughout India.

Categories: Business