Failure of Logan in India
FAILURE OF LOGAN IN INDIA By Pallavi Gupta
Contents * The JV between Mahindra and Renault * Synergies aspired to achieve * What went wrong * Reasons for failure * JV between Mahindra and Renault breaks * Lessons learned from the past * Corrections taken * Current situation
JV BETWEEN MAHINDRA AND RENAULT * A 51:49 JV between M+M And Renault in 2005 * Formed Mahindra Renault Private Limited * The JV was materialized in order to manufacture and sell the Logan in India * Logan was commercially launched in India in July 2007 * The Logan was manufactured at M+M’s Nashik Manufacturing facility
SYNERGIES ASPIRED TO ACHIEVE * Renault, a French company, wanted to enter in Indian market with an entry level Sedan. * M+M is known for it’s rugged and strong vehicles like trucks and recent years SUV like Scorpio and others like Bolero and Xylo but lacked a passenger car in it’s product portfolio. * So, both went for a JV. * Renault hoped to achieve low procurement and manufacturing cost, plus Indian market insights and distribution channels through M+M * M+M hoped to get knowledge of advanced technology, manufacturing, designing and prototyping process.
PLUS POINTS FOR LOGAN * Highly spacious * Ground clearance of 172mm. Highest among its competitors. * High efficiency diesel engine
WHAT WENT WRONG
* In spite of all sanguine aspirations, Logan in India flopped like anything. * Here give the figures of cars which were expected to sell and the real figures which were actually sold.
REASONS FOR FAILURE * High pricing * Not-so-good looks * Poor Marketing Promotions * Positioning of the car
PRICI NG * A Logan was priced higher as compared to other competitors like Maruti Suzuki Swift Dzire, Ford Fiesta etc. * The reason was it’s length and high imported content. * The Logan is 4.2 meters. So, it had to shell out extra excise duty of 22 percent
Contents * The JV between Mahindra and Renault * Synergies aspired to achieve * What went wrong * Reasons for failure * JV between Mahindra and Renault breaks * Lessons learned from the past * Corrections taken * Current situation
JV BETWEEN MAHINDRA AND RENAULT * A 51:49 JV between M+M And Renault in 2005 * Formed Mahindra Renault Private Limited * The JV was materialized in order to manufacture and sell the Logan in India * Logan was commercially launched in India in July 2007 * The Logan was manufactured at M+M’s Nashik Manufacturing facility
SYNERGIES ASPIRED TO ACHIEVE * Renault, a French company, wanted to enter in Indian market with an entry level Sedan. * M+M is known for it’s rugged and strong vehicles like trucks and recent years SUV like Scorpio and others like Bolero and Xylo but lacked a passenger car in it’s product portfolio. * So, both went for a JV. * Renault hoped to achieve low procurement and manufacturing cost, plus Indian market insights and distribution channels through M+M * M+M hoped to get knowledge of advanced technology, manufacturing, designing and prototyping process.
PLUS POINTS FOR LOGAN * Highly spacious * Ground clearance of 172mm. Highest among its competitors. * High efficiency diesel engine
WHAT WENT WRONG
* In spite of all sanguine aspirations, Logan in India flopped like anything. * Here give the figures of cars which were expected to sell and the real figures which were actually sold.
REASONS FOR FAILURE * High pricing * Not-so-good looks * Poor Marketing Promotions * Positioning of the car
PRICI NG * A Logan was priced higher as compared to other competitors like Maruti Suzuki Swift Dzire, Ford Fiesta etc. * The reason was it’s length and high imported content. * The Logan is 4.2 meters. So, it had to shell out extra excise duty of 22 percent