Rs 50,000 discount on Mahindra Logan

At a time when most automakers have gone for a price rise following the excise duty hike in the Budget, dealers of the troubled Mahindra Renault across the country are offering up to Rs 50,000 discounts on sedan Logan.

Dealers said discounts of various rates are available for both diesel and petrol variants of Logan, felling speculations that they were trying to liquidate stock as question mark continues to hang over the future of the JV between Mahindra & Mahindra and French auto maker Renault.

"A discount of Rs 50,000 is offered on both diesel and petrol variants and is valid till the end of this month," a National Capital-based dealer told PTI.

Similarly, a Guwahati-based dealer said discount of Rs 18,000 will be available on diesel version and Rs 50,000 on petrol variant. A dealer in Mumbai also offered similar discounts.

With the Logan failing to make its mark in the Indian market selling just 4,981 units in the April-February period of 2009-10, down 60.03 per cent from the year-ago period, Mahindra and Renault have been discussing the future of the JV.

In fact, Renault-Nissan alliance Chief Carlos Ghosn had said at the recent Geneva Motor Show that he will spell out the future of the JV when he comes to India for the inauguration of the Nissan plant in Chennai. The event will be held on Wednesday.

In February, both Renault and Mahindra had said they will disclose the future roadmap of the JV within 30-45 days.

When contacted an M&M spokesperson said the discount is a routine offer that the company gives and is only valid for the month of March.

With just a product on offer, the JV has run into trouble with M&M preferring to tweak the Logan in order to avail excise duty benefit on small cars, but Renault has shown little interest in it.

M&M had in January 2008 pulled out from a proposed tripartite JV with Renault and Nissan to set up a joint manufacturing plant in Chennai at an investment of Rs 4,500 crore (Rs 45 billion). The plant is now being developed by Renault and Nissan.

The discounts offered by the Mahindra-Renault dealers are in contrast to the recent price hikes by various companies, including Maruti Suzuki, Tata Motors, Honda Siel Cars, General Motors and Fiat, which went up to Rs 70,000 per vehicle.

The manufacturers hiked the prices of their products following the two per cent increase in excise duty to 10 per cent from 8 per cent in the Budget for 2010-11.