Breaking up

Mumbai, Jan. 4: Mahindra & Mahindra is pulling out of a tripartite venture with Renault SA of France and Nissan Motor Company of Japan.

The venture was formed to produce cars at a new plant near Chennai at an investment of Rs 4,000 crore.

The spokesperson for M&M refused to confirm the development but the buzz is that the Indian maker of utility vehicles has been unhappy with the way that Renault and Nissan have started forging partnerships with other automobile companies.

In April 2006, M&M and Renault launched a factory at Nashik to roll out the Logan, a mid-size sedan. It was the first plant set up in Maharashtra under the state’s mega project policy which governs investments of over Rs 500 crore.

The French car maker has since announced plans to launch a small car with two- wheeler maker Bajaj Auto. Nissan has also formed a joint venture with Ashok Leyland to make commercial vehicles.

“We have no comments to offer,” the M&M spokesperson said when quizzed on the development.

Sources maintained that M&M was not upset with the new joint ventures. “Anand Mahindra (vice chairman and managing director of M&M) has said in the past that the company has no problem with Renault tying up with Bajaj Auto,” sources said while reiterating that the Logan venture would not be affected.

In February 2006, M&M, Renault and Nissan had announced a joint venture to produce cars at a new plant near Chennai. The plant was expected to produce models for all the three partners. The initial plan was to build a plant with a capacity to make 400,000 cars a year.

M&M was expected to hold half of the equity capital of the joint venture with the other two partners picking up the rest. Although the unit was slated to come up on an over-1000-acre land near Chennai, unconfirmed reports say that progress in land acquisition has been slow.

Meanwhile, Mahindra Renault today announced that it would offer customers an attractive entry invitation price of Rs 4.49 lakh (ex showroom Delhi) on the 1.4-litre petrol variant of the Logan. The limited period offer comes into effect from January 7 and will be available for 45 days.