55 months of

Formed October 2005 Ended April 2010

operation

Mahindra Renault limited 51:49 strategic JV

New cycle of linkage-Leverage-learning

Linkage

Learning Leverage
 Linkage-leverage
• Linkage M&M
• Acquire new technology: M&M would get all
important expertise needed to build monocoque or unitary
construction and advanced engine technologies
• Market penetration: Expansion of product portfolio(
Addition of c-segment).
• Resource sharing: Mahindra will benefit from the sharing of R&D
of Renault with them.
• Time criticality: Market research by M&M shows strong demand
to c-segment (Logan) so developing a new product independently
will require more time than producing by JV with an existing
product.
• Leverage :
• Ability to keep procurement and manufacturing cost low
• Well established production facility
• Brand name: well established household name.
• Learning:
• M&M gained engineering capabilities for making superior engines
and world class manufacturing practices to bring efficiencies
through JV.
• Linkage Renault
• Acquire new Technology : Moving from left
hand drive to right hand drive
• Market Penetration: To mark its presence in Indian market
in short period of time.
• Resource sharing: As M&M has extensive manufacturing
knowledge(55 yrs) and low procurement and manufacturing
cost.
• Conflict of interest: As Mahindra has no presence in C-
segment, so there is less chance of conflict of interest.
• Leverage:
• Technological capability: Ready design of low-cost car Logan
was a huge hit in European market.
• Opportunity to mark its presence in Indian market
• Learning:
• Renault learned the lay of Indian market and ways of
doing business in India.
 Objectives
Renault M&M
Technology Exploit the technology of An opportunity to learn new
economies of scale technology
Resource Technology Market knowledge
Strategy Global expansion Develop core competency
Opportunity New market development New product development
Boost up the creeping sales
Expand customer base

Renault was eyeing global expansion along with India it also starting its operation in
Russia, Morocco, Romania, Colombia and Iran.
M&M is also trying to go global and showcase a product to rival.
 Benefits of alliance
• Internal benefits:
• Reducing risk (equity sharing of 51:49) and cost of new market entrance and new product development.

• Obtaining scarce resources

• Technology- Renault
• Production and sales network: M&M
• Obtaining cheap factor of production with help of M&M
• Develop economies of scale by gaining access to each other’s resources
Competitive benefits:
Defensive strategy in response to converging market
Reducing the time cycle of new product to the market.
Strategic benefits:
Creation and exploration of synergies among Renault and M&M
Building knowledge to expand into new market
Develop new product and improve productive by share of expertise and lower cost
Reduced exploration and production cost there by increasing profit margin.