Mahindra Renault plant to start operations by Jan

The work on the Mahindra Renault plant here is underway in full swing and it is expected to be ready in three months.

The unit, which is located near Mahindra & Mahindra's (M&M) state-of-the-art Scorpio facility here, is expected to kick start operations from January 2007, sources said.

Mahindra Renault is a 51:49 joint venture between domestic automobile major Mahindra & Mahindra (M&M) and French car giant Renault.

The plant, which will manufacture the mid-sized sedan Logan, entails an investment of Rs 650 crore.

The company aims to roll out 50,000 units of the right hand drive (RHD) entry-level C segment car in the first year. The number will be increased gradually.

About 75 per cent of the work to set up a fresh body shop and an assembly line has been completed and the remaining will be over in three months, the sources said.

The new plant will share the stamping division and paint shop of the near-by Scorpio plant. Commercial operations will be kicked off in January 2007 and the car is expected to be available in the market by February 2007, the sources said.

The car would have 50 per cent localised content right from the beginning itself. The company has also finalised vendors to source high quality components.

According to the sources, around 75 per cent of the vendors are common for both the Scorpio and Logan. The company has signed an agreement with the New Delhi-based JBM Auto to source sheet metal.

Currently, M&M manufactures the Scorpio and Bolero at its Nashik facility with a manufacturing capacity of 330 units per day.

The company is also planning to increase the capacity to 570 vehicles per day by August 2007. The expansion project would see investment worth Rs 100 crore.

The Scorpio plant here has 2,100 permanent workers and around 2,000 contract workers. Considering the future requirement, the company has recruited an additional 700 as trainees in about a month's time.

Those recruited include its former staff, who were suspended 10 years ago. Some veterans from the Scorpio and Bolero unit will be also be shifted to the Logan car unit.