Wheels
Renault eyes India for exports of cars
Reuters
Mumbai, February 23
France's Renault may export cars and car parts from India once a local joint venture starts production, a senior official said on Wednesday.
Renault, unveiling a joint venture with Mahindra and Mahindra Ltd (M&M), may also sell the Indian firm's Scorpio sports utility vehicle through its global distribution channel.
"We would like to source car parts for right-hand-drive markets from India, as it may be more economical," said France-based Luc-Alexandre Menard, senior vice president of international operations at Renualt.
Pawan Goenka, M&M chief operating officer, automotive sector, said the new venture, Mahindra-Renault Ltd., would make a right-hand drive version of the French company's Logan sedan from the first half of 2007, using kits from Renault to start with.
Renault launched the Logan in Romania last year and will roll it out in Russia, Morocco, Colombia this year, and Iran in 2006.
The right-hand-drive version of the car could be exported from India to other right-hand drive markets such as South Africa and other South Asian countries, Goenka added.
Facing stiff competition and cost pressures, car makers have been drawn to India. South Korea's Hyundai Motor Co. said last week it will build a second Indian plant to meet domestic and export demand, and German car makers BMW and Volkswagen are also considering setting up plants.
Renault, the industry's number four, is already in China, but is only just entering India, where the top three world players General Motors Corp., Toyota Motor Corp. and Ford Motor Co. are already competing with others such as Suzuki Motor Corp. and India's Tata Motors Ltd.
Mahindra once had a JV with Ford India. It still holds a 15 percent stake in the venture and Ford owns 5 percent of Mahindra, and M&M said that would be unaffected by the Renault deal.
Vehicle sales in India, Asia's fourth-largest economy, have leaped about 25 percent over the past year, propelled by rising incomes, the cheapest credit in 30 years and price cuts.
Citing data from independent think-tank, The National Council For Applied Economic Research, M&M estimated the market's compounded annual growth rate at 8.5-9.0 percent until 2012.
M&M will hold a 51 percent stake in the new venture, which is likely to have a debt-equity ratio of around 1:1 and cost an estimated 125 million euros between the two companies.
Mahindra-Renault may make the Logan at Mahindra's existing plants or a new one to be completed in the next 12-18 months in the northern town of Hardwar.
The companies are also separately discussing the possibility of selling the Scorpio through Renault's distribution network. M&M is seeking out new export markets, including Western Europe, South Africa and the Middle East.
© HT Media Ltd. 2004.