Marriages are made in heaven, so what’s wrong with three of them? Ask Renault, whose problems in India are linked to having too many JVs, says B&E’s pawan chabra
Apart from M&M, Renault has a tie-up with the CV major Ashok Leyland for light-commercial vehicles and with Bajaj Auto for the ultra-cheap car that the company had earlier proposed to launch by 2011 in competition with the Tata Nano. Renault is also facing difficulties in its ultra-low-cost car project (in alliance with Bajaj Auto). The tie-up is facing problems in areas like branding and technology, where the partners have had significant differences, which have reportedly been handled finally. The company, which showcased the prototype long time back hasn’t been able to get the project rolling in full flow till date; the only relieving point is that the forecasters comment that the market potential for the ‘Nano’ segment is too high for players to worry about competition as of now. But this is one forecast B&E has consistently believed is way off its mark.
Further, the more Renault delays the launch, the more they will lose in terms of business opportunity. Experts like Tutu Dhawan tell us that Renault has already missed the deadline, “keeping in mind the delay with regard to the technological fronts.” The company is also facing rough waters in its bid to achieve the $2,500 price tag for the small car. “I am not sure whether it is going to be $2,500 or $2,800 or $3,000. I am stuck into making customers happy and satisfied, but it is not going to be very far off,” admits Ghosn.
The JV with Ashok Leyland is what Ghosn may want to call his favourite JV right now w.r.t. the Indian market. The segment the company is operating in (light CV segment) is different vis-à-vis the other tie-ups, but the company may have to check its strategies when it comes to tie-ups with Bajaj Auto and M&M. And when one looks at the kind of response Tata Ace has already generated in the segment (Tata sells an average of around 10,000 units), the JV agreement has been widely expected to benefit both i.e. Renault and Ashok Leyland, which is still missing from the lucrative LCV segment. But the global financial situation has created problems for even this JV, since the liquidity crunch has forced the duo to postpone plans of setting up a separate plant for the manufacturing of light trucks. The trucks will now be manufactured within the current Ashok Leyland facilities and the Renault-Nissan plant.
Apart from M&M, Renault has a tie-up with the CV major Ashok Leyland for light-commercial vehicles and with Bajaj Auto for the ultra-cheap car that the company had earlier proposed to launch by 2011 in competition with the Tata Nano. Renault is also facing difficulties in its ultra-low-cost car project (in alliance with Bajaj Auto). The tie-up is facing problems in areas like branding and technology, where the partners have had significant differences, which have reportedly been handled finally. The company, which showcased the prototype long time back hasn’t been able to get the project rolling in full flow till date; the only relieving point is that the forecasters comment that the market potential for the ‘Nano’ segment is too high for players to worry about competition as of now. But this is one forecast B&E has consistently believed is way off its mark.
Further, the more Renault delays the launch, the more they will lose in terms of business opportunity. Experts like Tutu Dhawan tell us that Renault has already missed the deadline, “keeping in mind the delay with regard to the technological fronts.” The company is also facing rough waters in its bid to achieve the $2,500 price tag for the small car. “I am not sure whether it is going to be $2,500 or $2,800 or $3,000. I am stuck into making customers happy and satisfied, but it is not going to be very far off,” admits Ghosn.
The JV with Ashok Leyland is what Ghosn may want to call his favourite JV right now w.r.t. the Indian market. The segment the company is operating in (light CV segment) is different vis-à-vis the other tie-ups, but the company may have to check its strategies when it comes to tie-ups with Bajaj Auto and M&M. And when one looks at the kind of response Tata Ace has already generated in the segment (Tata sells an average of around 10,000 units), the JV agreement has been widely expected to benefit both i.e. Renault and Ashok Leyland, which is still missing from the lucrative LCV segment. But the global financial situation has created problems for even this JV, since the liquidity crunch has forced the duo to postpone plans of setting up a separate plant for the manufacturing of light trucks. The trucks will now be manufactured within the current Ashok Leyland facilities and the Renault-Nissan plant.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
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An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
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IIPM Links
IIPM : The B-School with a Human Face
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