Fuelling competition in the Indian mid-size car market, Mahindra-Renault on Tuesday unveiled 'Logan' - an entry-level no frills sedan - with prices starting at Rs 4.28 lakh for the base petrol variant.
The joint venture company between India's Mahindra & Mahindra and French auto maker will be rolling out 50,000 units of Logan this year from Mahindra's Nashik facility set up at a cost of Rs 700 crore (Rs 7 billion).
While the 1.4 litre petrol engine variant is priced at Rs 4.28 lakh (ex-showroom Mumbai), the 1.61 litre carries a price tag of Rs 5.69 lakh. The 1.5 litre diesel engine car, which has two variants, comes at a price of Rs 5.47 lakh to Rs 6.44 lakh.
Initially, Logan will hit the roads in the top 10 cities of the country in the second week of this month.
"We aim to sell the entire production capacity of 50,000 units per annum from the Nashik plant in the Indian market and we do not have plans to export the product at the moment," M&M vice chairman and MD Anand Mahindra said.
Renault SA President and CEO Carlos Ghosn said the joint venture entity, in which Mahindra holds 51 per cent, would 'ramp up production' if the market so demands.
The sedan, developed by Renault and its Romanian affiliate Dacia is modern but stripped of costly design features. It is almost a runaway success in the European market and has sold almost 450,000 units worldwide since its launch in 2004.
"Almost 50 per cent of the parts used in the car are sourced from Indian OEMs. Engines, however, are being sourced from Romania and Spain," Mahindra said, adding that the company would use local engines on a later date.
Stating that India offers "significant growth and profitability prospects", Ghosn said that the investment for the Nashik plant has been 15 per cent lower than what was forecast.
In February 2005, M&M and Logan had inked a joint venture to produce and commercialise Logan in India. The JV entity committed an investment of Rs 700 crore to produce 50,000 cars per year at its Nashik plant.
The annual demand for cars in India in the 'B' & 'C' segments is at around nine lakh units per annum with a CAGR of 17 per cent.
Mahindra-Renault managing director Rajesh Jejurikar, however, did not divulge the share the company has been targeting to grab through Logan.
Jejurikar said the company would roll out the product in 25 cities by August this year and the 'pan-India' launch would be completed by November.
Only in February this year, Mahindra and Mahindra formed a consortium with Renault and Japanese major Nissan to set up a Rs 4,000 crore (Rs 40 billion) greenfield automobile plant at suburban Oragadam, with a capacity to manufacture 4,00,000 units by 2009.
The facility would be used by all the three auto majors for production of vehicles from their respective stables, including variants of Logan.
Carlos Ghosn, president and CEO of Renault and Nissan (R) shakes hands with Anand Mahindra, MD, Mahindra & Mahindra as they pose with the Logan car at its launch in Mumbai.
Photograph: Indranil Mukherjee/AFP/Getty Images
