Sure, the company went on to develop the Scorpio, a more modern SUV than what they were making till then. The Scorpio's runaway success should have made Anand Mahindra think that they could get on with a proper passenger car project on their own. Instead, he decided to tie the knot with Renault two years ago. And for good reason too. Building a modern, monocoque passenger vehicle was Mahindra's strength and the company and its vendors needed to learn the art.
It needed huge investments to put up a new, different kind of factory, and more importantly, there was no time to waste on developing an all-new car from scratch. Renault had already developed the Logan, a car that was conceived as a low-cost yet contemporary automotive package for developing markets. It started its life as a Dacia in Romania (a subsidiary of Renault) where it was a huge success, and even spoilt west Europeans liked the idea of a no-frills yet no-nonsense automobile. Though it was developed as a 5,000-euro car, it retails at around 6,500 euros in various European markets today.
So why should Renault offer the Logan to Mahindra? Simple, the French giant could not ignore the Indian market for long and they wanted to learn – with an Indian partner preferably – the skills that are required to build affordable cars in a sustained manner. The current joint venture for building the Logan is for just 50,000 cars, and it may or may not get extended. Perhaps Mahindra will continue to build the Logan and pay Renault a royalty for some time. In the meanwhile, the Renault-Nissan combine will have its own car plant and new small car projects on stream. As for Mahindra, they would have a smooth entry into the passenger car market with a car that is 'right' from day one and they can build on this strength and make more passenger car models in the future.
