Renault to invest in car engine facility in India

French auto maker Renault, still battling financial blues, is planning to set up an engine and transmission facility in India with Nissan, its partner. This new plant is expected to come up adjacent to the vehicle manufacturing complex of Renault-Nissan at Oragadam, near Chennai.

A powertrain plant will allow Renault to locally supply the engines and transmissions for the troubled Logan sedan to erstwhile partners Mahindra & Mahindra (M&M) when the latter launches a new version of the car. This would drive down the cost of the Logan substantially and make it more competitive, as the engine and transmission unit accounts for 35-40 per cent of the total cost of the car.

M&M is presently forced to procure a variety of engines and transmission for the Logan directly from Renault’s manufacturing base in Romania and Spain, after paying hefty import charges. M&M imports the 1.4-litre and 1.6-litre diesel engines and the 1.5-litre petrol engine for the Logan. M&M on Thursday had announced a reduction of as much as Rs 80,000 on the Logan, although no engineering changes were to be made to the car. M&M last week bought Renault’s stake in the loss-making joint venture company, Mahindra Renault Private Ltd, taking full management control.

Rajesh Jejurikar, chief of operations, automotive division, M&M, said, “Renault has independent plans for making engines locally. We will source the engines for the Logan from them at later stages.”

When asked, a Renault spokesperson confirmed the move, stating, “Having an engine and transmission plant in India is a part of Renault’s long-term strategy. This plan was put on hold when the financial environment had deteriorated but now it has been revised. However, there is no final decision taken on the time line for the new facility.”

Although financial details of the engine plant has not been made public by either Renault or Nissan, typically an engine and transmission plant entail a minimum investment of anywhere between Rs 900-1200 crore, depending on the size of the plant.

This new plant will cater to Renault, Nissan and M&M when it comes onstream in the next few years. Although Nissan and Renault would largely make use of similar engines, both companies will have the liberty to tweak the engine power according to their requirements.

Both companies will also look to share vehicle platforms and technology to save on costs. The south India plant of the joint venture company has seen an investment of around Rs 4,500 crore and will have a total capacity of 400,000 units per year.

M&M, market leader in the utility vehicle segment, is planning to make multiple use of the platform on which the Logan sedan is based to make it more commercially viable. Though the Mumbai-based company lacks expertise in making cars (which includes design, engineering and total development of the vehicle from scratch), company executives say it is in talks with Renault for this.

Logan in the Path of Change

Mahindra Renault Logan, an offspring of the joint venture between the Indian car manufacturer Mahindra and Mahindra and the French car manufacturer Renault though fetched good prospects initially for the company, has soon run into trouble and is hardly selling 500 units per month.
The company started realizing that the much hyped model of theirs is not bringing them profit and that their future is at stake. They had realized this some time back but did not bother to look back to rectify the problem as they did not want to figure out the problem! But now the company is finally ready to accept it and is getting ready to revive the sagging sales of Mahindra Renault Logan.
The company currently is in the lookout for more and more options to revive and boost the sales of the car. Of the many options that the company is considering are, to bring in a new model, abandon the Logan, and refresh the Logan and so on. This mid-sized sedan, which has supported the existence of the joint venture, will not be deserted by the company but instead will be given little tweaks here and there to make it a small car; in fact little tweaks will be too little to do the magic so perhaps some major ones.
Mahindra and Mahindra is in talks with the Renault to see whether they can dress up Logan as a small car and thus reducing the excise duty of the car by including it in the small car sector, which piggy backs on low duty. Let us all wait for a new Logan which will be not only seen in the green paint with a yellow number plate.

Logan in the Path of Change

Mahindra Renault Logan, an offspring of the joint venture between the Indian car manufacturer Mahindra and Mahindra and the French car manufacturer Renault though fetched good prospects initially for the company, has soon run into trouble and is hardly selling 500 units per month.

The company started realizing that the much hyped model of theirs is not bringing them profit and that their future is at stake. They had realized this some time back but did not bother to look back to rectify the problem as they did not want to figure out the problem!

But now the company is finally ready to accept it and is getting ready to revive the sagging sales of Mahindra Renault Logan. The company currently is in the lookout for more and more options to revive and boost the sales of the car. Of the many options that the company is considering are, to bring in a new model, abandon the Logan, and refresh the Logan and so on.

This mid-sized sedan, which has supported the existence of the joint venture, will not be deserted by the company but instead will be given little tweaks here and there to make it a small car; in fact little tweaks will be too little to do the magic so perhaps some major ones.

Mahindra and Mahindra is in talks with the Renault to see whether they can dress up Logan as a small car and thus reducing the excise duty of the car by including it in the small car sector, which piggy backs on low duty.

Let us all wait for a new Logan which will be not only seen in the green paint with a yellow number plate.

Mahindra Renault plans two new launches this year

French car maker Renault is looking to introduce up to two new models in India with its partner Mahindra & Mahindra this year, although it has indefinitely postponed plans to launch products from its Chennai facility.

"Our Nashik facility (capacity) is under-utilised. We are actively looking at introducing one or two new models from the plant in this year in order to have better utilisation of the capacity," a Renault India spokesperson said.

Renault's joint venture with M&M -- Mahindra Renault Pvt Ltd -- currently makes the Logan at the Nashik plant, which has an installed capacity of 50,000 units per year annum. It had produced 14,404 units in 2008-09 compared to 26,653 units in the previous fiscal due to fall in domestic car demand.

"We want to fully utilise the capacity," the official said, but declined to give details of the forthcoming launches.

Besides, the domestic market, the cars would also be exported to neighbouring countries, he added.

Renault had indefinitely put on hold introducing its cars in the Indian market from its upcoming Chennai plant on account of global slowdown, which has affected the firm's worldwide operations.

Customers consider fewer models before buying cars

In what should ring the alarm bells for car-makers already facing a sales downturn, Indian customers are considering fewer models before making purchase decisions, global marketing information services firm JD Power said in a study.

"Twenty seven per cent of new vehicle buyers in India in 2008 considered at least one other model before purchasing their vehicle, compared with 38 per cent in 2007. This marks the first significant decline in cross-shopping rates since 2005," said JD Power Asia Pacific 2008 India Escaped Shopper StudySM.

The study compared shopping behaviour of two groups of customers -- buyers of recently launched models and buyers of models that have been on the market for more than two years.

For a fourth consecutive year, Maruti Suzuki India performed well in persuading shoppers to purchase the brand, with 38 per cent of all shoppers eventually purchasing one of its models.

Among other vehicle makes included in the study, buyers of Mahindra-Renault and Hyundai tend to shop around the most before purchasing their vehicles, while Skoda and Mahindra buyers were least likely to consider another model in their shopping process, the study added.

"The introduction of several new models into the market during the past few years as well as increased advertising by manufacturers is likely to create greater dissonance in the minds of shoppers and cause them to turn to friends or relatives for reliable advice," JD Power and Associates Senior Director Mohit Arora said.

As a result, consumers were being more decisive during initial stages of the purchase process and fewer car buyers were considering multiple models, he added.

Who is scoring in the war of sedans?

It’s the ride quality where Logan scores over Dzire. On most other counts, it’s the Maruti sedan that offers more value for money.

AFTER SELLING like hot property in the A3 segment for a year, the Mahindra Renault Logan 1.5 diesel now faces stiff competition from the country’s largest automobile manufacturer’s latest avatar Maruti Suzuki Swift Dzire.

The Logan is powered by a 4- cylinder, 1461cc, 1.5 Dci engine, and the Dzire is equipped with a multijet diesel 1248cc engine. To distill this technical mumbo- jumbo, the Dzire is more powerful and produces excellent acceleration thrust. Yet the slower Logan should not be dismissed off- hand – it has enough spunk to beat city traffic. Fire up both the engines, and there is the rattle and hum typical of diesel cars.

Between the two, it is the Renaults engine that makes its audible presence felt. Both have a 5- speed manual transmission, but the Dzire tops with its precise gear ratio and smooth shift. Needless to say, the Logans gearbox is not as slick as the Swift sedans. The Renault cars third gear has a tall ratio that may force frequent changing of gears.

When it comes to ride quality, the Logan scores. The Renault easily negotiates dirt roads. And the Dzire seems to take sadistic pleasure in making you feel each bump on the road. At a glance, neither the Dzire, nor the Logan are stunning beauties.

The Renault has an outdated 1980s boxy look that needs at least a set of nice- looking alloy wheels and a rear spoiler to give it a passable makeover. Maruti has played its trump card and transformed its Swift hatchback into the Dzire. The sedan, therefore, retains the sporty look of the hatchback at the front, with the thick line of chrome at the rear being a take- off of the Nissan Teana and the BMW 7- Series.

Looked at from the side, though, the Dzires silhouette is awkward given its disproportionate aspects, but compared to the Logan, the Swift sedan looks contemporary and fresh. When it comes to interiors, the Dzire leaves the Logan squirming in embarrassment. As Maruti has borrowed most of the Swifts interiors, there is a sense of familiarity with the Dzires dash and the instrument cluster.

The high- end ZDI trim gets steering wheel mounted audio controls and an automatic climate control, which are both firsts in the category. The integrated audio system is neatly tucked away in the dash and is user friendly. The Logan's interiors are tacky. The beige colour adds to the cheapness of the look. The inside door handles look down market. Improper placement of the power- window buttons on the central console under the air vents requires almost a GPS system to locate them during driving. The instrument cluster, though, is clear, big and simple.

The Renault is the only car that has an onboard computer in this class. The Logans trump card is the ample leg, head and shoulder room available. It has a 510- litre boot space, which is generous in comparison to the Dzires 400 litres, which had to be shaved to accommodate the intrusions from the trunks flab. The fuel average is high for both the cars. The Logan gives 18 kmpl in city conditions and 24 kmpl on highways; the Dzire returns 14 kmpl and 18 kmpl, respectively.

The Dzire costs Rs 6.7 lakh and the Renault, Rs 6.9 lakh. Not much of a price difference, but the Maruti sedan gives more value for money. Given that they are entry- level sedans, the Logan and the Dzire have a lot going for them.

Bajaj to launch four-wheeler commercial vehicle

Singing a different tune than its foreign partners, Bajaj Auto today said it will launch a four-wheeler commercial vehicle in mid-2012 from the ultra-low cost car (ULC) platform, which was originally planned to roll out a car with Franco-Japanese alliance Renault-Nissan.

"By the middle of next year, we will bring a four-wheeler from the ULC platform. For us, this will be a commercial vehicle and it will be a goods carrier," Bajaj Auto Chairman Rahul Bajaj told PTI.

In the smaller goods carrier space, other homegrown auto majors like Tata Motors and Mahindra & Mahindra are doing very well and the company is looking at that space, he added.

"We are a two-wheeler and three-wheeler maker and we are moving up toward the four-wheeler segment. With the help of our expertise and frugal engineering and Renault-Nissan's technological expertise, we will launch the vehicle," he said.

Bajaj also said the foreign partner will "market it (the product from ULC platform) as a car, but not a low-cost car", and it will be sold at a "mutually agreed price".

"The platform is same and it will be for four-wheelers. For them (Renault-Nissan), it is a car, while for us it is a commercial vehicle," he said, declining to comment on whether the two products will be launched simultaneously or not.

Bajaj did not clarify further whether there will be a single product or two different vehicles hitting the roads.

However, differing strongly, Renault said the company has not seen the final product and will not settle down with a vehicle having any shortcomings of a car.

"We are very clear that Renault would only be comfortable with a product that fulfills all the requirements of a car. Nothing short of that will pass our stringent requirements," a Renault spokesperson said.

Renault will be in a position to take a final call only after an exhaustive review of the final product that Bajaj will show, the official said.

"Till then, it would only be speculation and that is something we would not like to do," he added.

When contacted, a Nissan spokeswoman declined to comment. The partners had joined hands in 2008 to make a small car with a price tag of USD 2,500. The ULC was first scheduled to hit the roads in India in 2011, but was delayed due to differences between the partners on pricing and design.

While Renault-Nissan wanted to price the car at around USD 2,500, Bajaj insisted on lowering overall cost of ownership.

In 2010, Renault-Nissan announced the signing of a Memorandum of Understanding with Bajaj Auto to take forward their ULC car project.