French auto giant Renault is exiting from the joint venture with Mahindra & Mahindra. M&M has bought out Renaults 49 per cent equity stake in Mahindra Renault Pvt Ltd (MRPL),resulting in MRPL becoming a 100 per cent Mahindra group owned company. M&M will be responsible for the management of the Logan in the Indian market. The Renault name and logo will continue to be used on the Logan till the end of this calendar year. Over the course of a transition period of about 18 months,M&M will rename the car to a Mahindra owned brand name and the car will then only display the Mahindra logo. Other vehicles built on the Logan platform by Renault globally,such as the Sandero,are not included in this new agreement, both the companies said in a joint announcement. However,M&M refused to disclose the cost of stake acquisition. Renaults exit from MRPL was a foregone conclusion after the Renault-Nissan combine set up a new plant in Tamil Nadu. With an investment of Rs 4,500 crore,Renault Nissan Automotive India inaugurated a new passenger vehicle plant at Oragadam,near Chennai,last month. The restructuring of MRPL comes at a time when sales of the sole product sold under the joint venture,the Logan,has been steadily declining,coming down to as low as 351 units in March 2010. As per figures from SIAM,Logan's total sales for the April-March 2010 period stood at 5,332,as against 13,423 in April-March 2009,a drop of 60 per cent. In 2007-08 and 2008-09,the JV is understood to have reported losses of close to Rs 580 crore. What's worse,in 2009-10,losses are estimated to climb to Rs 700 crore. According to M&Ms annual report for FY09,investments in the JV were to the tune of Rs 154 crore.
