Renault small cars for India?

Close on the heels of announcing a Euro 125 million joint venture with utility vehicle maker Mahindra & Mahindra for mid-size car 'Logan', French car major Renault has said it will be 'studying the possibilities' for bringing in a compact car in the Indian market, which would be manufactured locally.

"If we are successful and we believe we will be, then we are ready to study the possibilities of launching a small car in India," Luc Alexander Menard, Senior vice-president (International Operations), Renault, told PTI during the ongoing 75th Geneva Motor Show.

Menard, who was in India last month when the JV with M&M was announced, said small cars, priced at low prices, currently dominated the Indian market. "And the market is growing very swiftly and quickly. As per our projections, the growth will continue," he added.

Menard said if agreed to, the company would manufacture the small car in India, just as it was doing for the 'Logan'.

"If you want to offer cars at acceptable prices, it is good to assemble and localise in India," he said.

Asked it would bring the compact car through the JV with M&M or through a separate route, including on its own, he said these things would be worked out later.

As per the 51:49 JV with M&M announced on February 23, 'Logan' would be launched by first half of 2007 and the Indian partner will have a 51 per cent stake while Renault will hold the remaining 49 per cent. The JV will be called Mahindra Renault and provides for production of 'Logan' at an M&M facility, the capacity being for 50,000 cars per year.

The arrangement with Renault was for a specific product, M&M had said after it was signed. "This is a single product alliance for making the 'Logan'. That's it," said Alan Durante, Executive Director, M&M.

Asked whether Renault would like to increase stake in the JV, Menard said, "Its a possibility, but we don't have to do that for the moment."

The French carmaker's small car kitty comprises models like 'Twingo', which is a three-door car available in 1.2 and 1.4 litre capacity diesel engine. This costs about euro 9,000 (about Rs 517,000).

It has another model, 'Clio', which is available in both

petrol and diesel engines which vary from 1.2-2 litres. Its

price ranges between euro 11,000 (Rs 630,000) and euro 20,000 (Rs 11,50,000). This is one of its best-selling car in the compact car segment and is the second most-selling car in its category in Europe, Menard said.