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M&M to foray into motorcycle segment

Last updated on: February 12, 2010 15:14 IST

Mahindra & MahindraAuto major Mahindra & Mahindra said on Friday it will foray into the motorcycle segment with a full range of products by this year even as it will take a final call on continuation of its joint venture with French car maker Renault within the next 45 days.

"We do have a plan to get into the motorcycle segment. This will happen this year," Mahindra & Mahindra vice-chairman and MD Anand Mahindra told reporters on the sidelines of an event organised by auto industry body Society of Indian Automobile Manufacturers in New Delhi.

"We are going to be a full range player. We are simply not going to come out with one motorcycle product," he added.

Asked about the status of its 'one-product' joint venture with Renault, Mahindra said, "We will be coming out with a statement within 30-45 days (on) how the Mahindra and Logan venture will continue in the future, what is the roadmap."

M&M has a joint venture with Renault -- Mahindra Renault Pvt Ltd -- which manufacture the only product Logan in India.

Renault has recently announced to set up its own distribution network to sell the products which will be manufactured from the upcoming Chennai facility, being constructed with Japanese partner Nissan.

In the last one year, sales of Logan has fallen drastically and the JV currently sells about 550 units per month.

M&M does not have any objection on Renault launching its products alone, Mahindra said adding, "only thing that went wrong with Logan was creating an expectation which was too high for the vehicle."

He also said higher tax structure for bigger car was also one of the reasons for failure of Logan.

"The tariff structure changed here, which militated against the car beyond certain size. That disadvantage was frankly too much to cope with without changing the size of the car," he added.

On its foray into the US market, Mahindra said the company plans to launch its sports utility vehicle Scorpio there in on track.

"There is no decision on assembling the Scorpio in the US. If the market receives our product well, we will look for an assembly in the US. . .the option to use our partner Navistar's facility is also open," Mahindra said.

Speaking on the expectations of the coming Union Budget, he said the government should be very careful on withdrawal of the stimulus packages.

"The stimulus package in India was not a very overwhelmingly large one like in China or in the US. It is a very very measured package," he added.

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