Renault to build budget car in India with Mahindra

23rd February 2005, Comments 0 comments

PARIS, Feb 22 (AFP) - French car maker Renault said Tuesday it had agreed to create a joint venture with Indian manufacturer Mahindra and Mahindra to build and sell Logan cars, a low-cost model, in India from 2007.

PARIS, Feb 22 (AFP) - French car maker Renault said Tuesday it had agreed to create a joint venture with Indian manufacturer Mahindra and Mahindra to build and sell Logan cars, a low-cost model, in India from 2007.

The provisional cost of the project was EUR 125 million (USD 165.65 million) for a production capacity of 50,000 vehicles per year, Renault said in a statement.

The joint venture, which will be called Mahindra Renault Ltd., will be 51 percent owned by the Indian group and 49 percent by Renault.

"For Renault, the entry on the Indian market, where European car makers, excluding Fiat and Skoda, are still absent, marks a major step in the group's international development," the French company said.

Production was to begin in the first half of 2007.

The Indian automobile market grew 68 percent between 1998 and 2003 and in2004 amounted to 1.04 million vehicles, Renault pointed out.

Economic growth in India, with a population of more than a billion, surged more than eight percent in 2004.

India will become the sixth country for production of the Logan, after Romania, Russia, Morocco, Colombia and Iran.

Renault was hoping to sell a million of the low-cost Logans by 2010, Renault chief executive Louis Schweitzer said in an interview published recently in the Journal des Finances.

The budget car was developed by Romanian car maker Dacia and its parent company Renault.

Renault says the Logan has been designed for markets with limited consumer purchasing power and where customers are seeking cars without the accessories sought by buyers in western Europe.

© AFP

Subject: French News

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