The joint venture between Mahindra & Mahindra and Renault, Mahindra Renault Private Limited (MRPL), has run into problems. It is believed that Renault is looking for another partner to replace M&M in the venture. The French company reportedly approached Bajaj Auto with the offer, which is likely to turn it down. Mahindra Renault sells only one product – the Logan – in India.

The car’s dismal sales have resulted in M&M seeking a bigger say in product re-engineering. The company has not been able to price the Logan competitively because of the 20 per cent excise duty on it. M&M had suggested reducing the car’s length to 4 metres to have it qualify for the lower, 8 per cent excise duty.

However, Renault rejected the idea because it did not want to alter the car’s global platform. The Logan sold only 500 units in September 2009, 71 per cent lower than sales in September 2008. The April-September 2009 sales too were less than a third of sales in the same period last year. Despite reports about problems between the two companies, both M&M and Renault have denied that either of them is looking for a split in the partnership.

Courtesy: www.driveinside.com