Mumbai: Automobile major Mahindra and Mahindra (M&M) announced Friday it was buying out global car major Renault's 49 percent stake in their joint venture which manufactures the Logan sedan car.
"M&M will buy Renualt's equity stake in Mahindra Renault Pvt. Ltd., resulting in it becoming a 100 percent Mahindra group owned company," said a company statement.
Renault, however, will continue to supply M&M key components, including the engine.
The joint venture was established in 2005.
"The new agreement with Mahindra and Renault will give us the opportunity to chart out a new strategy to help drive the Logan brand in India which will also include engineering changes, in keeping with customer requirements," said Pawan Goenka, president of the automotive sector at M&M.
As per the agreement, the Logan will continue to sport the Renault brand and will be removed after 18 months after which the car shall only display the Mahindra logo.
The company said it will source more local components for manufacturing the Logan.
Logan is the only car offered by the joint venture and M&M holds the licence to sell it in India, Nepal and South Africa.
The Logan is currently manufactured at Mahindra's Nashik plant. Till date, about 44,000 cars have been sold in India and more than 2,600 units exported to Nepal and South Africa.
Renault, on the other hand, will continue to focus on its partnerships with other Indian auto companies like Bajaj with which it is planning to develop a small car.
Renault said it is determined to enter the Indian market.
"We reiterate our long term commitment to India through the recent inauguration of our manufacturing facility in Chennai and our plan to launch a range of Renault cars between 2011 and 2015," said Katsumi Nakamura, Renault executive vice president Renault for Asia.
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