Mahindra Renault Pvt. Ltd launched its sedan Logan at a price point that is 10% lower than the car’s ex-factory price in Europe, on Tuesday.
This pricing is an attempt to challenge local firms such as Tata Motors Ltd.
The 51:49 joint venture between India’s largest tractor maker Mahindra & Mahindra Ltd and French firm Renault SA has priced its entry-level petrol version with a 1.4-litre engine at Rs4.28 lakh (ex-showroom, Mumbai)
Mahindra Renault also launched a 1.6-litre petrol and a 1.5-litre diesel version of the car. “We have started the production of the car one month in advance and we have saved 15% of the estimated cost of production,” said Carlos Ghosn, president and chief executive officer of Renault SA and Nissan Motor Co. Ltd. The Logan will be manufactured at M&M’s Nashik plant in Maharashtra that has a capacity to produce 50,000 cars a year.
At present, half the components that go into the Logan are local. “We expect to increase the localization from 50% currently, to 80-90% in future. Currently we are importing the engine but in future we plan to make it locally,” said Sylvain Bilaine, managing director, Renault India Pvt. Ltd, the wholly-owned Indian subsidiary of Renault SA. The car’s vendors will also get the opportunity to export the components to the other plants of Logan in Europe,” he added.
Mahindra Renault has planned a phased launch for the car—in the first phase, the car will be available in 10 cities in April for booking; by August it will be available in 25. And by November, it will be available across the country. Potential buyers will likely have to wait 30 days for delivery.
“We will be slowly ramping up and the Nashik plant will achieve its full capacity of 50,000 cars a year from July,” said Rajesh Jejurikar, managing director, Mahindra Renault.
M&M also plans to enter the car financing business with Renault.