The major Indian automobile company Mahindra & Mahindra (M&M) has recently pulled itself out of the three-party Joint Venture (JV) company along with Renault and Nissan. The M&M is a well known equipment-to-software company and the sources from the company have stated that it has taken the decision only about a year after it entered the JV. The companies had also announced to build a Rs 4,000-crore car manufacturing plant in Chennai at that time. The company was holding a 50 per cent stake in the JV company and the other two major carmaker companies of Renault and Nissan was equally holding the rest of the share.
According to the sources from the industry, M&M was not quite happy with the establishment of a number of partnerships between the French company Renault and the Japanese Nissan in India. The two companies have been forming the partnerships for various ventures in the country. Though, the officials from none of the companies agreed to make a comment on the issue, the sources from the industry are informing that M&M was unhappy with the plans of Renault to set up a small car project, along with Bajaj Auto. The sources added that the annoyance of M&M increased because Renault went for the pact in spite of having a joint venture to produce the mid sized-sedan Logan in India, along with M&M and Nissan.
While talking about the development further, another reliable source from M&M has stated that the Nissans decision of signing an agreement with Ashok Leyland for three separate joint ventures also did make M&M unhappy. According to the source, Nissan has signed the agreement for operating light commercial vehicle manufacturing in India. The industry sources added that the manufacturing plant that the tri-lateral joint venture planned was supposed to be situated in an area of over 1,100 acre at Oragadam, south of Chennai. The plant was also supposed to have a production capacity of 400,000 cars and utility vehicles.
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| Posted : 1/7/2008 |
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