Renault entering India via Joint venture

Topics: Emerging markets, Mahindra & Mahindra Limited, Automotive industry Pages: 9 (2426 words) Published: October 25, 2013
International Business Environment
(12-13 S2AA SHRO27-6)
Renault Entering India via Joint Ventures:
A Case Study.

Name: Athin Kumer Kundu

Student ID: 1200288

Word count: 1992

Course Tutor

Dr. Samar Baddar.

Executive Summary

The authorities of Renault and Mahindra and Mahindra after being convinced to do business with each other with a view to realizing their entrepreneur dreams, clearly adopted joint venture mode and subsequently they enriched the history with their glorified activities. They were definitely charmed with amicable and congenial factors for business from wide range of commercial socio-political and economical perspectives, embedded with both companies. There had been researches and studies of different businesses modes and they settled businesses relationships for their commercial pursuits from those strategies. An effort is being initiated in this paper to find out the reasons behind the historical joint venture mode instead of Greenfield mode between these two companies. Simultaneously, suggestions and recommendations are being put in places so that these efforts may help emerge the French auto-maker, Renault as a good corporate citizen and minimize political risks from India by performing its social responsibility roles. Table of Contents

Page no
1. Introduction4
1.1 Joint venture mode5
1.2 Greenfield entry mode5
1.3 Massive advantages helped Renault adopt JV entry mode 6 2. Discussion on India as an emerging Economy6
3. Finally Indian market characteristics
convinced to adopt JV mode7
4. Conclusion8
5. Good Corporate Citizen8
6. Political Risk Management8
7. Recommendations9
8. Short Action plan9
9. Reference list11

Introduction:

Renault: Renault, a multinational manufacturer of vehicle from French was established in the year of 1899 by Louis Renault, currently having business activities with 118 countries has offered a share around fifteen percent to French government. Over the years the company excels in generating seasoned and demanded cars and vans showing the world, being the third biggest automaker of Europe and, the ninth biggest of the glove in terms of production. In the year 2007, this French company accomplished a joint venture with Mahindra & Mahindra possessing 51 percent share with the company. However, the year 2010 witnessed the end of the joint venture accomplishment and Renault agreed to support the latter with key components and business with licence agreement. (www.renault.com)

Mahindra and Mahindra : On the other hand Mahindra & Mahindra Ltd (M&M) was founded in the year 1945 as a steel trading company by K.C. Mahindra and Malik Ghulan Mohammed, witnessed business opportunity over the years and started manufacturing and selling vehicles. The company covers business activities worldwide and possessed share 49 percent with Renault in their joint venture programs. Fortune India 500 of 2011 recognised the company as 21 among the top companies in India. (www.mahindra.com)

Market scenario: Markets scenario at the same time gave us the information that though Renault -Mahindra presented Logan, a saloon car with four door to India, very low-cost vehicle, having been suitable for developing market, such as India from the point of buying capacity, their offer became undoubtedly a subject of bitter facing commodities from hard competition with rivalry companies such as Tata, Ford, Hyundai and many more. At the same time the famous Financial Times in one of its report estimated that market segment of India, covering purchasing capacity of that time under this, had been only one fifth over the whole auto vehicle industry and services.

Opinion and findings: Under such severe competition along with meagre proportion of market segment and the features of India as a recognised big emerging country, the...
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