Mahindra Renault Divya

Kedar

M&M vice-chairman & managing director Anand Mahindra with Renault-

Nissan CEO Carlos Ghosn

1945 Willys- franchise MUVs Characteristics Market share 50%+ Customers R&D 275 dealers 20 sales offices Rural, semi-urban, urban Motto: value for money

1898 Voiturette-12 orders Characteristics Customers R&D Only automaker to have eight cars with the maximum

five-star Euro NCAP rating.

Renault

Mahindra-Renault

JV called Mahindra Renault Ltd Set up at a cost of euros125 million (Rs720 crore) M&M 51% stake, Renault 49%. Manufacturing and Marketing LOGAN Launch LOGAN in first half of 2007 Production site - capacity of 500,000 units per year

within 5 years win-win situation for both companies and for Indian

customers Renault boost profit margins 2.5% (2006) to 6 % (2009)

Logan

priced Rs 4.5-5.5 lakh to take on competition from the likes of Esteem,

Aveo, Ikon, Indigo, Fiesta, City and Verna

JV Optimize production costs Joint investment in plant and infrastructure Product innovation, customer service excellence,

global competitiveness Other synergies

Renault’s benefits

Mahindra’s contribution: understanding of the Indian market, supplier base, market leadership

fast growing Indian economy rising incomes stoke demand for cars Domestic demand by 2010 – 2 million cars parts in India, 35 % cheaper than in Europe or Japan Established distribution network through Mahindra Other significant opportunities for profitability

Mahindra’s gains Renault’s expertise in engineering and

manufacturing, adaptation to meet customer requirements

a platform for exports of Mahindra branded cars - taking Scorpio global through Renault competitive through global presence. Scorpio will be manufactured at Renault's Dacia plant

in Romania. would take a good 7-8 years to manufacture their cars

Potential road blocks Losing control over technology Cultural differences – managerial difficulties Government policies Mahindra’s entry into the car segment Kinetic Honda, Hero Honda

Mahindra-Renault-Nissan Alliance

Renault-Nissan Alliance 1999 Renault 44.4 % stake in Nissan

Nissan 15% stake in renault Initial Nissan-Suzuki JV talks MoU – TN govt, M&M-Renault-Nissan Oragadam (Chennai) plant – 1.1K acres 4,00,000 cars p.a. – production by late 2009 Investment Rs 4000 crore Mahindra’s enhanced presence in TN

Why India? Third wave Global auto industry – decreasing CFRIC Ford, GM - Reporting losses Maximize return on capital Low costs of development and manufacturing

capacity Access to cheap, skilled engineering, R&D resources BRIC : by 2010- 40% growth, 51% added capacity