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Old 23rd October 2009, 11:24   #16
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Pre Xylo Era:

No.2 @ M&M : Boss, why did you sign up with Carlos. All of us knew it was a looser in the long run.
No.1 : Aare no re, wait naa. I have had this dream for many years to lift TATA out of the cabby image. See, I hate these european's so much so that I want to make them a ordinary city taxi.

Few months down the line
No.2 : Boss, we made it. All metro's are full of carlo's taxi's. Now what...
No.1 : Lets not position Xylo's as competitors to Tavera's or sumo's or safari's. Lets hint @ carlo's exit - lets call "End of Sedan's".
No.1 : Wow, good idea.

Now
No.2 : Boss, boss, Carlos' is hinting at leaving us. What to do.
No.1 : Nothing, we have done it already. At least we learnt their way of making cars, just like the Ford cars. hehe - those dumbo's, when will they realize..!!!
No.2 : Ok boss, Good day, I am leaving to delhi to attend a conference.
No.1 : Dont take those red tag Merc's to the airport. Take the Carlo's one.
No.2 : BUMMER...!!!
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Old 23rd October 2009, 11:25   #17
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With the Logan, Renault gave India a car that was below a customers design benchmark and was over priced by Mahindra. The car looked dated even before it came out and the interiors were too crude. But I think there is still a lot of potential in the platform, its very strong in the areas of space and ride comfort. Perhaps a re skin job on the exteriors for a more comtemporary design and better interiors at a killer price could breathe life into the Logan again.
Perhaps Renault/Nissan is pinning their hopes on the new Micra and its sedan version. This will be a far more modern product especially considering its export obligations.
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Old 23rd October 2009, 11:43   #18
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when any international brand ties up with our local manufacturers, one thing which really bugs me and makes me feel sad is that our manufacturers due to cost cutting make the interiors really cheap by offering cheapo plastics. There should be a feeling of awe every time a driver feels sits inside the car.

I really don't understand why Renault gave us the Logan in the first place when they have lovely cars like the clio, megane etc. I am sure with a decent diesel and petrol engine of the mentioned cars Renault would have done incredibly well in our market.

With respect to the owners of Logan, i think the Logan is good for its space and nothing else.
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Old 23rd October 2009, 14:23   #19
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To survive in Indian market where most brands thrive on the after sales image, it was obvious that M&M with its poor customer orientation unable to feed the needs of renault. I feel the original manufacturer should have the will to independently push their brands. Same thing in case of FIAT which is having the best products in their shelves and are trying to push that through TATA and are facing the heat. They should leave the mentality of trying to tickle the market with a hammer. Few lessons can be learnt from HONDA in this aspect.
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Old 23rd October 2009, 17:12   #20
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Quote:
Originally Posted by Soumya_Ramesh View Post
To survive in Indian market where most brands thrive on the after sales image, it was obvious that M&M with its poor customer orientation unable to feed the needs of renault. I feel the original manufacturer should have the will to independently push their brands. Same thing in case of FIAT which is having the best products in their shelves and are trying to push that through TATA and are facing the heat. They should leave the mentality of trying to tickle the market with a hammer. Few lessons can be learnt from HONDA in this aspect.
Good point IMO. Selling a new sedan via M&M's dealerships could have been one of the reasons. If I remember it right when Ford entered India they insisted on a separate network as they didn't want to station their cars next to M&M's UVs. Ofcourse, the escort failed for various other reasons and M&M's image has improved since then but this is still one of the reasons for the failure next to the decision of launching Logan in India.
As for Fiat's example, I think the situation was completely different for Fiat. They lost credibility earlier and they had to regain the lost image and the only way was to join hands with a trusted brand. In the case of Renault, they were entering for the first time and they should have invested in building their own network.
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Old 24th October 2009, 00:45   #21
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Quote:
Originally Posted by Soumya_Ramesh View Post
To survive in Indian market where most brands thrive on the after sales image, it was obvious that M&M with its poor customer orientation unable to feed the needs of renault. I feel the original manufacturer should have the will to independently push their brands. Same thing in case of FIAT which is having the best products in their shelves and are trying to push that through TATA and are facing the heat. They should leave the mentality of trying to tickle the market with a hammer. Few lessons can be learnt from HONDA in this aspect.
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Originally Posted by pacman2881 View Post
Good point IMO. Selling a new sedan via M&M's dealerships could have been one of the reasons. If I remember it right when Ford entered India they insisted on a separate network as they didn't want to station their cars next to M&M's UVs. Ofcourse, the escort failed for various other reasons and M&M's image has improved since then but this is still one of the reasons for the failure next to the decision of launching Logan in India.
As for Fiat's example, I think the situation was completely different for Fiat. They lost credibility earlier and they had to regain the lost image and the only way was to join hands with a trusted brand. In the case of Renault, they were entering for the first time and they should have invested in building their own network.
Going with ^ that logic Fiat would have done better when they were alone, and should be doing bad now that they have got into partnership with Tata.

But that is not true, is it ?

Why are we blaming Mahindra(Which according to their sales numbers, happens to be a trusted brand) for poor sales of Logan when it is so obvious that in the face of its immediate competition this product have nothing going for it.

And the vehicle is from Renault, not Mahindra. And when Mahindra needed much support and confidence building to do something to revive Logan's sales, the Renault was in the town making more and more partnerships with other companies.

And if that isn't bad enough, in near future there is nothing stopping Nissan to sell product competing with those from Mahindras.

IMHO, Mahindra's vehicles may not be the most beautiful, but are still much better than Logan.

Last edited by anmol2k4 : 24th October 2009 at 00:49.
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Old 24th October 2009, 06:53   #22
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@@anmol

We cannot compare Fiat and Renault here. Fiat ended up with a lot of trouble from PAL whereas Renault is going to start from a clean slate.

I agree that Mahindra's sales are great. But in which segment? In utility vehicles, and SUVs (if you call the Scorpio an SUV). In simple words the average customer set of UV/SUV is quite different from cars. Also unlike the car segment there is little competition in the UV/SUV segment? How many other players are there? At what price points?

Just because MM is successful in UV/SUV does not mean that they are capable of selling any other automobile in the industry.

The Logan was ill suited. There is no doubt about it. The question is that why did MM enter the JV if they found Logan poor? The Logan was released much before the JV. So obviously MM made some serious calculation mistakes here.

Also worldwide to this date Renault and Nissan compete in the market. The common ownership does not warrant "no competition" clauses to either the brand. If MM didn't know that I would suggest they should spent more time reading up on the automotive industry!

Now, MM cannot simple wash of their hands by saying that the product is good. In fact the customer bought the car through Mahindra. There is no two way for it. Why did they bring the vehicle if it was to be ditched later? Surely, Renault was not desperate for the 20,000 units (targeted) from India (a small drop in their global sales with lesser margins due to the partnership)? Surely, Renault has resources to come to India alone?

I suspect this is a classic case of shifting all the trouble onto the partner's desk when things are going wrong. The customer who trusted them looses.

Last edited by Trapezio : 24th October 2009 at 06:54.
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Old 24th October 2009, 11:15   #23
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Most of the foreign manufacturers while stepping on to foregin stores try to get a JV partner , because it helps with the unnecessary headaches of dealing with local govt , policies , emissions , etc.
The JV is basically aimed at testing the ground , building up internal databases ,build up reliable channels of communications for lobbying and at some point they cleverly break on the partnerships .

What i feel lacking is the govt objective of developing internal players and incase if a foreign manufacuter needs to cut off a JV they should not be allowed to trade or setup assembly atleast for a minimum of 5 years so that what ever data they have collected regarding market conditions , whatever help the Indian partner has put into the JV is atleast nullified , if not reimbursed .
In this Mahindra renault JV alliance , the Initial fault lies with Mahindra and not with Renault .

Mahindra were/ are more accoustomed to selling SUV type of vehicles and I think they would have judged or concluded that looks do not matter as long as the car is fuel efficient , has a decent engine , dosent matter if the car is boxy etc .

Most of the JV happens with a minimum gurantee forecast of sales ( potential sales expected by mahindra with the logan ) and when Mahindra dosent sell , it isnt the fault of Renault .
Renault on its part has modified various aspects of the car ,so that it can suit the Indian conditions .

Also earlier with Ford , Mahindra provided the platform to step into India and before everyone knew Ford bought out Mahindra on the deal .

Has anyone wondered why most of the automotive companies have their offices at New Delhi ,even though their production facilities are more south oriented ? The simple ans is for lobbying with govt ...

So the final verdict is the fault is not with Renault or Mahindra ,but with the govt policies .
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Old 24th October 2009, 15:24   #24
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Quote:
Originally Posted by Trapezio View Post
@@anmol

We cannot compare Fiat and Renault here. Fiat ended up with a lot of trouble from PAL whereas Renault is going to start from a clean slate.

I agree that Mahindra's sales are great. But in which segment? In utility vehicles, and SUVs (if you call the Scorpio an SUV). In simple words the average customer set of UV/SUV is quite different from cars. Also unlike the car segment there is little competition in the UV/SUV segment? How many other players are there? At what price points?

Just because MM is successful in UV/SUV does not mean that they are capable of selling any other automobile in the industry.
I am sorry but I don't agree with you on this, it is ridiculous to presume that Mahindra is incapable to sell cars because they have only sold UV's and SUV's till now. Can you kindly tell me how Tata managed to sell their Indica when they were mostly Truck and S/UV manufacturer before its launch.

Quote:
Originally Posted by Trapezio View Post
The question is that why did MM enter the JV if they found Logan poor? The Logan was released much before the JV. So obviously MM made some serious calculation mistakes here.
I think that without having JV in place, concrete discussion on the products, their price and marketing strategy is not possible.

And even after the JV, Mahindra wouldn't have expected Logan to be the only product of the JV. And if Renault was having uncompromising attitude on the margins, Mahindra might have thought that they would learn the lesson quickly when French would have seen the sales numbers.

Quote:
Originally Posted by Trapezio View Post
Also worldwide to this date Renault and Nissan compete in the market. The common ownership does not warrant "no competition" clauses to either the brand. If MM didn't know that I would suggest they should spent more time reading up on the automotive industry!
I am sorry, there is a huge difference between a Joint Venture and companies with cross share holding. And there is a difference in relationship among companies in these two forms of business alliance. And an Alliance cannot last long without trust. But because we don't know how the JV was formed and what led to its end, it is futile to discuss this without much information.


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Originally Posted by Trapezio View Post
Now, MM cannot simple wash of their hands by saying that the product is good. In fact the customer bought the car through Mahindra. There is no two way for it. Why did they bring the vehicle if it was to be ditched later? Surely, Renault was not desperate for the 20,000 units (targeted) from India (a small drop in their global sales with lesser margins due to the partnership)? Surely, Renault has resources to come to India alone?
Can you kindly point out one area in which Logan edges out its competition ? I am sorry we need to look no further to put the blame for poor sales than on the product itself. And how can you expect MM to have more commitment to JV, when Renault was getting into more and more JVs with different companies in same sector.

Have you seen any other company to do such a thing ?

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Originally Posted by Trapezio View Post
I suspect this is a classic case of shifting all the trouble onto the partner's desk when things are going wrong. The customer who trusted them looses.

Alliance like this is based on trust, and no business would prop-up a very unfaithful partner and a future competitor. Especially when the product is as bad a s Logan.

From the side of Mahindra, is see on one things lacking - commitment and that is to be expected when Renault was not only lacking commitment but also launched a poor product with a wrong price tag. And i am sure you would agree the Renault was responsible for breakdown of trust.
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Old 24th October 2009, 16:27   #25
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Originally Posted by anmol2k4 View Post
Can you kindly tell me how Tata managed to sell their Indica when they were mostly Truck and S/UV manufacturer before its launch.
Dear Anmol,

I must admit I must have ended up using some information which I had not used in the post.

Tata managed to sell Indico from being a truck manufacturer. I agree. Till this date they have not made that transition yet. Its ten years since they started the process yet. The service standards is still not up to say Honda or Toyota.

Quote:
Originally Posted by anmol2k4 View Post
I think that without having JV in place, concrete discussion on the products, their price and marketing strategy is not possible.

And even after the JV, Mahindra wouldn't have expected Logan to be the only product of the JV. And if Renault was having uncompromising attitude on the margins, Mahindra might have thought that they would learn the lesson quickly when French would have seen the sales numbers.
I assure you that nobody will enter a JV and then discuss their margins, products etc. Not if they are responsible for their money. If they have issues regarding products, margins etc, then the standard across the world procedure is to sign a "Letter of Intent". This will allow both the partners to verify things. The Mahindra-Renault JV also went through the same process. Google will help you in this regard.

Quote:
Originally Posted by anmol2k4 View Post
And how can you expect MM to have more commitment to JV, when Renault was getting into more and more JVs with different companies in same sector.

Have you seen any other company to do such a thing ?
Renault had said from day one that they will be having multiple partners. There are a variety of reasons for that. I don't have the time to list them here.

Yes, there are a few instances where this has happened. In China VW have similar partnerships in passenger cars with both SAIC and FAW. They compete in the market. If SAIC or FAW has problem in sharing VW products they are allowed to design their on products and sell.

Similarly Honda has multiple partners in China. Honda Automobile (China) Company and Guangzhou Automobile Industry Group. Google for more details.

Having multiple JVs is not rocket science. Only thing which they promise in such cases is not giving the same product to multiple partners. In exceptional cases that also is possible!

Quote:
Originally Posted by anmol2k4 View Post
Alliance like this is based on trust, and no business would prop-up a very unfaithful partner and a future competitor. Especially when the product is as bad as Logan.
True. But still I do not understand why Logan 'alone' has to be blamed. Mahindra cannot have entered a JV without knowing what they would be selling. Period!

Surely if Renault proposed to manufacture the Renault Vel Satis in India, MM wouldn't have become a JV partner.

If you are still not convinced, I cannot do anything. Just think that I am biased.

Last edited by Trapezio : 24th October 2009 at 16:30.
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Old 24th October 2009, 16:51   #26
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According to me the Logan failed because:

1. It got this advertisement to be a cheap car with great value for money. But pricing was too steep. One does not understand whose fault it was, Mahindra's or Renault's. I am sure at the right price point Logan would have had decent sales, despite the dull looks.

2. Complete lack of inspiration in the layout of instruments /equipment. I think whatever was provided was very basic and located at odd places.

But as a Logan owner, I enjoy the space and an absolutely brilliant diesel engine that keeps me smiling despite doing 54000 kms in 27 months. I went in for the Logan, as I found the engine to be more refined than the DICOR of TATA Indigo.But obviously not many have the same opinion.

I just hope they do something to arrest this decline . And hope the JV has not gone beyond repair.
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Old 24th October 2009, 17:52   #27
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Quote:
Originally Posted by Trapezio View Post
Dear Anmol,

I must admit I must have ended up using some information which I had not used in the post.

Tata managed to sell Indico from being a truck manufacturer. I agree. Till this date they have not made that transition yet. Its ten years since they started the process yet. The service standards is still not up to say Honda or Toyota.
With Logan we are discussing sales, and you attributed its poor sales on the Mahindra's poor brand and lack of experience, Tatas example refutes that because regardless of their poor image, lower service standards and lack of experience they did manage to sell lot of Indicas and other passenger cars.

Quote:
Originally Posted by Trapezio View Post
I assure you that nobody will enter a JV and then discuss their margins, products etc. Not if they are responsible for their money. If they have issues regarding products, margins etc, then the standard across the world procedure is to sign a "Letter of Intent". This will allow both the partners to verify things. The Mahindra-Renault JV also went through the same process. Google will help you in this regard.
Well, I am still learning all this so being a noob in this area I will not act like I know how JVs are formed.

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Originally Posted by Trapezio View Post
Renault had said from day one that they will be having multiple partners. There are a variety of reasons for that. I don't have the time to list them here.
I am sorry I have found nothing on Internet to support that claim, so kindly provide me some article on that. But with googling that I have done, I have gathered that Renault got into JV with MM in 2005 and in 2007 with Bajaj and then later got into JV with Ashok Leyland and that strained the relations with MM so they hinted with severing of JV with MM.

I have also found the following details on JV which may be of interest to you :-

Quote:
In the new venture, M&M will additionally handle finance and distribution. Renault will be responsible for purchase, engineering and quality. The Indian company will have four board members to Renault's three, the former appointing the managing director, the latter the non-executive chairman. While Ford still has a 5 per cent equity stake in M&M, there is no proposal for Renault to do a similar take.The Hindu Business Line : Mahindra ties up with Renault — Joint venture to make Logan cars in India
Quote:
Originally Posted by Trapezio View Post
Yes, there are a few instances where this has happened. In China VW have similar partnerships in passenger cars with both SAIC and FAW. They compete in the market. If SAIC or FAW has problem in sharing VW products they are allowed to design their on products and sell.
I am sorry but Chinese case cannot be applied anywhere in the world, and there is a reason why SAIC and FAW won't mind having VW having JV with both the companies. In fact they would be more than happy to do so as both SAIC and FAW are owned by same entity - Chinese Government. And Chinese Government wont mind as they would be creating two brands on the back of VW's experience and technology.

Quote:
Originally Posted by Trapezio View Post
Similarly Honda has multiple partners in China. Honda Automobile (China) Company and Guangzhou Automobile Industry Group.
Again Chinese Government wont mind as they would be creating two brands on the back of Honda's experience and technology.
Having multiple JVs is not rocket science. Only thing which they promise in such cases is not giving the same product to multiple partners. In exceptional cases that also is possible!



Quote:
Originally Posted by Trapezio View Post
True. But still I do not understand why Logan 'alone' has to be blamed. Mahindra cannot have entered a JV without knowing what they would be selling. Period!

Surely if Renault proposed to manufacture the Renault Vel Satis in India, MM wouldn't have become a JV partner.

If you are still not convinced, I cannot do anything. Just think that I am biased.

I think this matter can be settled because :-
Quote:
In the new venture, M&M will additionally handle finance and distribution. Renault will be responsible for purchase, engineering and quality. The Indian company will have four board members to Renault's three, the former appointing the managing director, the latter the non-executive chairman. While Ford still has a 5 per cent equity stake in M&M, there is no proposal for Renault to do a similar take.Source:The Hindu Business Line : Mahindra ties up with Renault — Joint venture to make Logan cars in India
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Old 25th October 2009, 09:57   #28
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@@anmol

Just because MM is successful in UV/SUV does not mean that they are capable of selling any other automobile in the industry.
Given the price point of the Scorpio as well as the profile of buyers (quite a few urban upper middle class professionals), I do not agree that Mahindra is incapable of selling a sedan in the market

One more point is that Mahindra Group also manages a premium hospitality brand 'Club Mahindra'
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Old 25th October 2009, 18:16   #29
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One more point is that Mahindra Group also manages a premium hospitality brand 'Club Mahindra'
Club Mahindra ain't premium IMHO
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Old 25th October 2009, 20:18   #30
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I feel inclined to believe that Renault is at fault here. Also, don't think Mahindra has that much to lose. They're a capable enough indegenous manufacturer and can have other opportunities for tie ups sans Renault.

Renault's product strategy in India does not give our market the credit it deserves and I have little sympathies for the price it may have to pay for that.
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