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M&M to seek petrol engines from Renault for Scorpio

V Phani Kumar

Mahindra & Mahindra (M&M) has inked a deal with Renault to source petrol engines for its Scorpio project. According to sources close to the deal, the two companies have agreed to fit Renault's 2600 cc Euro III compliant petrol engine on M&M's multi-utility vehicles based on the Scorpio platform, which is still under wraps.

The company is also understood to be considering two diesel engines, which will have the same engine capacity but different engine out puts for the Scorpio.

Currently, M&M has an agreement in place with Hindustan Motors for sourcing 1800 CC Isuzu-make petrol engines for its MM ISZ, a utility vehicle based on the Jeep theme meant for the police and paramilitary forces.

However, it could not be ascertained whether this agreement will still continue after the new agreement with Renault has been signed.

Auto analysts in Bombay have said that the new agreement with Renault is good news for the company, especially since the price differential between petrol and diesel has steadily been declining. Customer preferences have also been shifting from diesel to petrol engines, they said. M&M is expected to launch the much-awaited Scorpio some time in the first half of fiscal 2002.

According to sources, M&M is banking on the success of the Scorpio to plough back the lost marketshare during the current fiscal to Toyota Qualis.

It is understood that over 120 engineers have been working for close to two years on the Scorpio project. Company sources have said that M&M has so far spent over Rs 5 billion on the new plant set up at Nashik for manufacturing the Scorpio. The company is expected to introduce at least three models on this platform.

Meanwhile, the company's tractors division is planning to increase its marketshare further through introduction of new models. Ravi Santhanam, executive vice president of the company, said, "In the coming fiscal, we will be introducing a new model each month, to cater to the individual needs of farmers in various parts of the country."

In the domestic market, the company currently offers three models of tractors -- Bhoomiputra, Sarpanch and Arjun -- at different price points. During the current fiscal, the company has increased its marketshare by about 7 per cent to 35 per cent, in spite of an industry decline by 11 per cent.

M&M has set itself the target of becoming the largest tractor company in the world by the year 2005. While multinational tractor companies like John Deere and New Holland have ventured into the domestic market, M&M is targeting niche segments for growth in the US market.

Having thrown in the hat for acquiring Zetor, a Czechoslovakian tractor company that has been put on the block, it is now looking at expanding into the southern European markets.

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