Mumbai, Feb. 9: French auto maker Renault and Mahindra and Mahindra (M&M) are working to restructure their joint venture in Nashik that makes and markets the Logan, the mid-size sedan which was launched with great fanfare in April 2007 but failed to live up to expectations.

“We will come out with a detailed restructuring plan over the next 30 to 45 days,” said Marc Nassif, country general manager and managing director of Renault India. M&M officials could not be reached for comment.

The two partners have had serious differences over the way the joint venture was being run. Renault has a 49 per cent stake in the venture with M&M holding the rest.

There has been some speculation that Renault might raise its stake in the venture but Nassif refused to comment on this aspect.

The joint venture has been battling problems arising from falling sales of the Logan and mounting losses.

Sales of the Logan fell to little under 5000 units in April-December 2009 from over 12,000 units in the same period of the previous year.

“Mahindra and Renault will continue to work together in the coming days. We have no problems in working together,” Nassif said.

Meanwhile, Renault has unveiled plans to establish an independent distribution network for a range of cars that it plans to roll out from next year.

Renault is planning to launch the luxury sedan Fluence and the crossover Koleos in 2011. These two cars will be produced at Renault Nissan India’s greenfield manufacturing facility at Chennai. It will launch five new car models over the next three to four years including an entry-level small car.

A senior official from Renault told The Telegraph that prior to the introduction of Fluence and the Koleos, the company would set up stand-alone dealerships in 12 to 15 cities. Although the top tier cities will be covered in this phase, the plan is to ramp up the distribution network significantly.

“After these two cars are launched, we plan to put in place 35 to 40 dealerships every year. For this, we are not looking at the metros alone. The target is to reach out to a huge segment of population. By 2015, we will have at least 140 dealerships,” he added.

M&M decided in early 2008 not to invest in the Chennai facility, ending the possibility of a three-way alliance along with Nissan.

The Chennai facility will start operations by May.

“We (Renault and Nissan) will only share the manufacturing facility but will make and sell our own cars,” Nassif said.

Nissan will use the facility to make its recently developed compact car. Renault will come out with its own compact car as well as mid-sized sedans from the same facility.

The unit will have the capacity to make 4 lakh units a year and it has been set up at an investment of nearly Rs 4,500 crore. So far, Renault has invested about Euro 100 million in the new plant.

Renault and Nissan are also examining the feasibility of establishing a plant to make car engines. The French auto giant has a 44 per cent stake in Nissan.