Defines joint venture and makes you understand better by the case study.

1. Joint Venture
Mahindra & Renault
Dept. of IE&M

2. JOINT VENTURE
• Two or more firms combine equity to form a new
third entity
• The level of equity can vary from very small
amounts to large multi-million dollar investments
• The amount contributed by each party will not
necessarily be equal
• Very detailed agreements covering what each
party is to provide, what each can expect, and
how each is to operate in the joint venture

3. Joint Venture of Mahindra & Renault
MAHINDRA
• Set up as a steel trading company in 1945
• In 1947, introduced the utility vehicle
• Key operation on 18 industries
RENAULT
• French car making company
• Known for its Engine manufacturing and Design

4. Why - JV
For Mahindra
• Mahindra & Mahindra, the fourth largest Indian
vehicle maker wanted to extend its range to
passenger and family cars
• To increase their Engine efficiency
• Renault follows a strategy of profitable growth
(high quality, innovative range of vehicles and
services)
For Renault
• Entering the Indian market
• To establish international market

5. LOGAN
• Mahindra & Mahindra and Renault have decided
to join forces to produce and commercialize
LOGAN, developed by Renault
• The two groups concluded a framework
agreement for setting up a joint venture in India
with Mahindra retaining a 51 per cent share and
Renault 49 per cent
• The JV will be called Mahindra Renault Ltd
• The estimated project amount will be 125
million euros
• The capacity of the factory for Logan will be
50,000 cars per year

6. Plus points - LOGAN
•
•
•
•
Higher Spacious vehicle
High efficiency Diesel engine
44000 Satisfied customer
Exported to SA, Srilanka etc

7. Renault exits from Logan JV
•
•
•
•
•
•
Cost
Not so good looks
Excise duty (4.2 mts)
Poor marketing promotions
Manufacturing environment
The two partners have had serious differences
over the future of the venture, especially as the
only model from the company
• The Logan has seen its sales go down by over 60
per cent in 2009-10, selling only 5,332 units

8. M&M gets license
• Mahindra & Mahindra renamed the 'Logan' sedan
as ‘Verito’
• Renault agreed to continue to support M&M and
Logan through a license agreement and supply
key components, including the engine and
transmission
• M&M could use the Logan brand for 18 months
after which it was to drop the Renault badge
from the product as well as dealerships

9. Current Situation
• Mahindra
• Renault

10. Conclusion
•
•
•
•
Lack of Transparency
Responsibility (51:49)
Each had their own goal
Leadership qualities

11. THANK YOU
Kiran Hanjar
1MS12MIA03
I sem M.tech
MSRIT