Mahindra&Mahindra’s negotiations with Malaysian company Proton is sincerely pointed towards twin purpose – for the probable Lotus range SUVs and small cars under an exclusive JV. This comes in the wake of Anand Mahindra’s visit to Proton’s Indonesia unit which makes Lotus cars. Previously, Lotus brand had been with Buggati which could wash it to Proton right back 1990. The deal on Lotus may be either licentious brand rights to manufacture a range of models or a JV with net business terms.
The Lotus range from Proton includes the Exige, Europa, Evora, Elise SUVs and T127 race car. Of these, Europa, also called Grand Tourer, which is a two seater could not please either people or the industry analysts chiefly due to its high price. M&M is taking its strategy to strengthen its low and high level vehicles for filling the slots in range. Lotus seems to fall on the axis of premium sector. M&M is keeping its fingers crossed over the models under Proton, particularly the Savvy versions. Built with 1200 cc Renault engine Savvy, a mini super car is capable of running 24km per liter on test conditions but a minimum of 16-18 kms under normal conditions.
This is not the first time for M&M and Proton to have talks over JV in India. The companies had tried their dialogue in 2007 which failed to yield any result. Proton in the meantime had discussions with the Indian Argentium Motors, owner of the then Daewoo brand and this too faced the hiccups. This time, M&M is clear with its objective to enter into the JV with Proton. However, M&M does not neglect the chance got for having talks with Ssang Yong, the South Korean company for the same project of cars. The Korean’s company has already chosen six of the bidders who are willing to take over the company.
Ssang Yong has been under the court’s restructuring since 2009 and the bid should be finalized in one month from now. SAIC of China has got 10% stakes in this Ssang Yong. M&M’s balance sheet and financial status is well on the mark with Rs1700 crore in addition to the debt-to-equity ratio of 0:4:1. So it likes to have soft pedaling over JVs or take overs. M&M has entered into dialogue with the Saudi company Ras Al Khaimah for the purpose of armour cars in Africa and West Asia. The Saudi company wants to utilize the expertise and experience of M&M in defence vehicles. But M&M will spell out its final verdict on the basis of its ensuing deal with Ssang Yong.