Mahindra Slashes Logan Prices in India

Mahindra & Mahindra, India’s top utility vehicle and tractor maker, has operated price-cuts for its Logan car of 5 percent to 12 percent in order to boost sales of the Renault-sourced sedan. Last week, Mahindra bought Renault’s 49 percent stake in the joint venture that makes and sells Logan vehicles in India. Renault withdrew from this business as the Logan sales were poor.

The French carmaker will continue to supply key components, such as engines and transmissions, to the Indian company and the Logan will keep the Renault logo until the end of the year, with the makeover scheduled to be implemented in the course of an eighteen-month transition period.

The price cuts, which vary between $539 and $1,798 (24,000-80,000 rupees), were made in order to offer better value for its customers, Mahindra said. "There was a lot of uncertainty about the future of the Logan in the minds of our dealers and customers," Chief Operating Officer Rajesh Jejurikar was quoted as saying by the Automotive News. "We wanted to give a fresh momentum to the Logan through a reduction in prices," he added.

Logan sales, which were good during 2007 when the car launched in India, have decreased drasticly as the car qualifies for a factory gate duty of 22 percent due to its length of more than 4000mm. "The rationalization of the prices will provide a better value proposition for our target segment who had found the car too expensive," Jejurikar said.

The price cuts make the Logan the cheapest car in its segment, about 35,000 rupees better value than Maruti Suzuki's diesel-powered Swift DZire sedan. "We have an 18-month period to refresh the product and we are working on various alternatives," Jejurikar said.
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