Renault and Indian auto major Mahindra and Mahindra, which jointly manufacture the sedan Logan in India, will expand their product portfolio to better utilise the capacity at their Nashik plant in Maharashtra.
"We are currently assessing the viability of four to five Renault cars to be manufactured in the facility and will finalise the models with Mahindra," Ashish Sinharoy, Renault India's senior vice president of corporate affairs, told IANS.
This comes as a U-turn for both car makers who had in the past ruled out expanding the product line-up in the joint venture in the short term.
The scope of the current joint venture does not go beyond manufacturing Logan and integrating the distribution and sales networks.
But two factors have worked towards the re-think: Logan's sales have plummeted, and the Nashik facility has been rendered under-utilised.
Sinharoy said Logan, which did very well in the first year of its launch, has been a victim of the economic slowdown. Coupled with this, there was a lack of options in terms of other models available in the joint venture's stable; hence the decision to expand, he said.
Mahindra-Renault managed to sell close to 26,000 units of Logan during the 11 months of 2007-08 since the car was launched, while the number nearly halved to only 13,423 last fiscal.
"As a result, the plant has been under-utilised and the dealer network is also under-selling. So we are actively looking at optimising the utilisation and have decided to introduce new models in our line-up," Sinharoy said.
"Although the numbers for the new vehicles won't be huge, it will definitely pep up the dealer network and induce demand."