M&M may pull out of their JV with Renault-Nissan: Srcs

A in exclusive, sources have told CNBC-TV18 that Mahindra & Mahindra may pull out of the Renault-Nissan and M&M joint plant in Chennai and focus on the Chakan plant for production. Sources added that Renault-Nissan will now have a 50-50 partnership for the Chennai plant. Renault will, however, continue joint production of Logan at the Nasik plant.      

By Swati Khandelwal,  CNBC-TV18

M&M is likely to pull out from the Joint venture between Mahindra-Renault and Nissan that was formed sometime in February last year. Now, this new joint venture will be between Renault and Nissan and it will be a 50-50 joint venture. The three companies had initially committed Rs 4,000 crore fo this joint venture wherein Mahindra was a 50% share holder and the remaining 25% was split between Renault and Nissan. Now it will be a 50-50 between Renault and Nissan and they both will invest about Rs 2000 crore each.

That Mahindra has pulled out of this venture does not mean that Mahindra and Renault products will not be made. The plant that manufactures Logan at Nasik will still continue, in fact, even the Renault cars which will be produced from the Chennai plant will be marketed through MRPL, which is Mahindra Renault Private Ltd. They will be distributed and market through the same joint venture that they had initially. But now Mahindra wont be a part of that three-way joint venture which was formed.

CNBC-TV18 tired to speak with Mahindra and Renault but they both declined to comment on this matter. As mentioned, Logan will still continue and that’s what the plan is currently.