New Mr

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New Mr

  1. 1. Mahindra Renault Divya Kedar
  2. 2. M&M vice-chairman & managing director Anand Mahindra with Renault-Nissan CEO Carlos Ghosn
  3. 3. <ul><li>1945 Willys- franchise </li></ul><ul><li>MUVs </li></ul><ul><li>Characteristics </li></ul><ul><li>Market share 50%+ </li></ul><ul><li>Customers </li></ul><ul><li>R&D </li></ul><ul><li>275 dealers 20 sales offices </li></ul><ul><li>Rural, semi-urban, urban </li></ul><ul><li>Motto: value for money </li></ul>
  4. 4. <ul><li>1898 </li></ul><ul><li>Voiturette-12 orders </li></ul><ul><li>Characteristics </li></ul><ul><li>Customers </li></ul><ul><li>R&D </li></ul><ul><li>Only automaker to have eight cars with the maximum five-star Euro NCAP rating. </li></ul>Renault
  5. 5. Mahindra-Renault <ul><li>JV called Mahindra Renault Ltd </li></ul><ul><li>Set up at a cost of euros125 million (Rs720 crore) </li></ul><ul><li>M&M 51% stake, Renault 49%. </li></ul><ul><li>Manufacturing and Marketing LOGAN </li></ul><ul><li>Launch LOGAN in first half of 2007 </li></ul><ul><li>Production site - capacity of 500,000 units per year within 5 years </li></ul><ul><li>win-win situation for both companies and for Indian customers </li></ul><ul><li>Renault boost profit margins 2.5% (2006) to 6 % (2009) </li></ul>
  6. 6. Logan <ul><li>priced Rs 4.5-5.5 lakh </li></ul><ul><li>to take on competition from the likes of Esteem, Aveo, Ikon, Indigo, Fiesta, City and Verna </li></ul>
  7. 7. JV <ul><li>Optimize production costs </li></ul><ul><li>Joint investment in plant and infrastructure </li></ul><ul><li>Product innovation, customer service excellence, global competitiveness </li></ul><ul><li>Other synergies </li></ul>
  8. 8. Renault’s benefits <ul><li>Mahindra’s contribution: understanding of the Indian market, supplier base, market leadership </li></ul><ul><li>fast growing Indian economy </li></ul><ul><li>rising incomes stoke demand for cars </li></ul><ul><li>Domestic demand by 2010 – 2 million cars </li></ul><ul><li>parts in India, 35 % cheaper than in Europe or Japan </li></ul><ul><li>Established distribution network through Mahindra </li></ul><ul><li>Other significant opportunities for profitability </li></ul>
  9. 9. Mahindra’s gains <ul><li>Renault’s expertise in engineering and manufacturing, adaptation to meet customer requirements </li></ul><ul><li>a platform for exports of Mahindra branded cars </li></ul><ul><li>- taking Scorpio global through Renault </li></ul><ul><li>competitive through global presence. </li></ul><ul><li>Scorpio will be manufactured at Renault's Dacia plant in Romania. </li></ul><ul><li>would take a good 7-8 years to manufacture their cars </li></ul>
  10. 10. Potential road blocks <ul><li>Losing control over technology </li></ul><ul><li>Cultural differences – managerial difficulties </li></ul><ul><li>Government policies </li></ul><ul><li>Mahindra’s entry into the car segment </li></ul><ul><li>Kinetic Honda, Hero Honda </li></ul>
  11. 11. Mahindra-Renault-Nissan Alliance <ul><li>Renault-Nissan Alliance 1999 </li></ul><ul><li>Renault 44.4 % stake in Nissan Nissan 15% stake in renault </li></ul><ul><li>Initial Nissan-Suzuki JV talks </li></ul><ul><li>MoU – TN govt, M&M-Renault-Nissan </li></ul><ul><li>Oragadam (Chennai) plant – 1.1K acres </li></ul><ul><li>4,00,000 cars p.a. – production by late 2009 </li></ul><ul><li>Investment Rs 4000 crore </li></ul><ul><li>Mahindra’s enhanced presence in TN </li></ul>
  12. 12. Why India? <ul><li>Third wave </li></ul><ul><li>Global auto industry – decreasing CFRIC </li></ul><ul><li>Ford, GM - Reporting losses </li></ul><ul><li>Maximize return on capital </li></ul><ul><li>Low costs of development and manufacturing capacity </li></ul><ul><li>Access to cheap, skilled engineering, R&D resources </li></ul><ul><li>BRIC : by 2010- 40% growth, 51% added capacity </li></ul>
  13. 14. Merci Beaucoup

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