Logan rolls out of the Nashik factory in India During a visit to the Logan factory at Nashik, Maharashtra, following the car’s launch the day before in Mumbai, Carlos Ghosn, CEO and President of Renault, commented on the rapid start of production of Logan in India. “Less than two years after signing the joint venture agreement with our partners Mahindra, the first customer’s Logan has rolled off the line at the Nashik plant. This was possible due to Renault’s expertise in product and process engineering, quality and purchasing, together with Mahindra’s manufacturing capabilities, frugal approach and extensive knowledge of Indian customers, and the professionalism of the workers at this factory. I believe our Indian customers will be delighted with the result.”
Mahindra-Renault – Renault’s Gateway to India
Signed in Mumbai on March 21, 2005, the Mahindra-Renault joint venture was set up to manufacture and sell Logan sedan on the Indian market from early 2007. With a total projected cost by the two partners of Rs 700 crore1, (51% by Mahindra and 49% by Renault), reflecting the respective shares in the JV, the joint venture supplies for an initial annual production capacity of 50,000 cars, in 2 shifts.
This win-win joint venture allows Mahindra to enter the passenger car market in India – up to now Mahindra has only been present in the SUV and tractor markets – while Renault gains access for the first time to the Indian automobile market.
India is a key market for Renault both in the case of Renault Commitment 2009, which has set a target of 800,000 additional new cars sold worldwide by 2009, and beyond that date for further international growth, a significant share of which is expected to come from India. With a population of 1.1 billion inhabitants, India has experienced strong economic growth, passing 8 % in 2006.
The automobile market progressed by 16.8% per year between 1998 and 2006, reaching 1,15 million vehicles in 2006 (PC+LCV) with a marked preference for small and medium segment cars (A,B & C Indian segments).
Confident in the growth potential of the Indian market, Renault has taken a second step to increase its presence on the market, committing to the creation of a greenfield production site in Chennai by 2009 with partners Mahindra and Nissan, which will offer an initial installed capacity of 400,000 vehicles per annum.
Logan – a vehicle for international growth for the Renault groupThe Logan program was conceived with international development in mind and which contributes to the growth targets set by Renault Commitment 2009. Logan represents a significant part of the growth target of 800,000 extra vehicles.
Since its launch in September 2004, Logan has proven a global success, both in emerging and established markets alike. Almost 450,000 Logans have been sold worldwide since it was launched.
As of the beginning of 2007, Logan is sold in 51 countries on five continents (47 countries under the Dacia brand, 4 under the Renault brand). The Logan family has begun to grow with the arrival of the Logan MCV at the end of 2006 and Logan Van in early 2007.
Today, Logan is produced in four countries - Romania, Russia, Morocco and Colombia. In addition to India, it will be produced in two other countries from 2007 - Iran and Brazil. Not including the new Chennai project in India, the planned production capacity by 2009 is approximately 1 million cars.
The Logan factory at Nashik – one of Renault’s benchmark new international production facilitiesLogan is being produced at Mahindra’s Nashik plant, 180km northwest of Mumbai in the state of Maharashtra. It is the first site worldwide to produce right-hand drive versions of Logan. Investment made at the plant ensured that the layout of the plant was modified to incorporate the Logan production facilities.
The Logan plant at Nashik has 4 main workshops: stamping of body panel, body in-white, where the body panels are welded together; the paint shop; and final assembly. The plant’s production rate will be set at 12 vehicles per hour.
A dedicated Logan body shop building of 12,000m², including a logistics area has been built on a vacant area and connected to the central conveyor system of the already existing plant. The facilities include unit assembly, main line, metal finishing line, and three roller hemming robot cells for doors.
The press shop and paint shop are shared facilities between the Logan and Scorpio production lines. Paint shop facilities have been converted to provide an under body sealing line dedicated to Logan, has been inserted in the flow of production; a dedicated wax line has also been erected.
The trim, chassis & final assembly process dedicated to Logan has been implemented in a fully redesigned building, a total area of 18,000m² with 6,000m² newly constructed and 12,000m² renovated. Facilities include PBS - painted body storage for 36 vehicles - trim line, engine assembly, roller benches, final line, a quality check area, final control for signature in white and a dispatch yard.
All shop floors are connected through a central conveyor of approx 4 kms that carries all Nashik produced bodies, painted bodies and vehicles from shop to shop.
The Logan project at Nashik was managed through a joint Renault & Mahindra Team. 20 Renault Project Engineers were stationed at Nashik during 9 months in different departments, (press shop, body shop, paint shop, trim and chassis and quality) in order to install and tune the manufacturing equipment.
Since Manufacturing Approval has been given, the team has handed over the plant to the Engineering Plant Vehicle Team, headed by a Renault Senior Engineer.
Renault Production WayLike all Renault group factories, the Nashik Logan plant deploys the Renault Production Way (known by the French acronym SPR), which provides extremely precise definitions of the organization and industrial procedures. SPR identifies the Alliance’s best industrial practices and formalizes them to facilitate sharing throughout the Group; it also strives to achieve continuous improvement in these standards.
Several levels of quality control are built into the SPR. Each operator inspects his own work. In addition, an expert is appointed for each workshop to check the quality of the outgoing subassemblies.
At the end of the line, the water-tightness of each vehicle is systematically checked, along with all its electrical and mechanical functions. Each vehicle is then tested on a roller bench and a short test circuit, to validate the quality of final assembly.
High level of local supplier involvementQuality is also a central issue in Renault’s relations with its suppliers. Improvement plans were defined in collaboration with Indian suppliers, and progress is closely monitored by Mahindra Renault’s experts. Local content accounts for around 50% of the bought out parts; action plans are being deployed to gradually increase that proportion to 60%.
Employment & trainingThe Nashik plant currently employs 3,500 people, 1,100 of whom are in production positions dedicated to the Logan project. A complete and accurate training program was implemented at the beginning of this project. After recruitment, new operators followed cultural training to learn about Mahindra, Renault and the Logan project. This was followed by a dexterity training program under the Renault Production Way (SPR) procedure, then Body & Vehicle Model training programme to perform - I DO - WE DO - YOU DO – operations. Operators were then evaluated on performance based on which only those who achieved a grade L3 or upwards were allowed to work on the vehicle assembly line. The best operators were identified as Senior Operators and have visited the Dacia - Romania Plant in Pitesti to see the Logan lines running. They came back to Nashik having learnt about project and plant management in order to implement the same level of performance & quality as seen at Pitesti.
By the end of March 2007, 1.65 million hours of training had been provided to 1,000 of the plant’s operators. The plant is conducting an intensive recruitment drive to hire production workers, technicians, storekeepers and fork-lift operators in order to meet the staffing needs of production operations. A total of 500 new employees, including 350 production workers, were hired for the Logan project in the course of 2006.
ConclusionRenault’s industrial partnership with Mahindra has already reaped rewards for both partners.
Renault has learnt a lot from its Indian colleagues. Their professionalism and frugal approach to the business meets with Renault’s search for profitability. The synergies between the partners not only mean that they can bring products to their Indian customers that they will want to buy, but also show how Renault can leverage these synergies across its business.
Equally, Renault has brought expertise in quality, engineering and purchasing which will positively contribute to Mahindra’s business and more widely to the automotive business in India, lending it a new energy as India comes to the fore as an economic power for the 21st century.
The biggest reward is yet to come as the shared ambition of the partners to create a win-win partnership results in our Indian customers being delighted by driving India’s class-leading car in terms of quality, spaciousness, price, modernity and style.
Exchange rates:
1 Indian Rupee = 0.01734 Euro
1 Indian Rupee = 0.02315 US Dollar
About The Mahindra Group
The US $4 billion* Mahindra Group is among the top 10 industrial houses in India. Mahindra & Mahindra is the only Indian company among the top five tractor manufacturers in the world and is the market leader in multi-utility vehicles in India. The Group has a leading presence in key sectors of the Indian economy, including trade and financial services (Mahindra Intertrade, Mahindra & Mahindra Financial Services Ltd.), automotive components, information technology & telecom (Tech Mahindra, Bristlecone), and infrastructure development (Mahindra GESCO, Mahindra Holidays & Resorts India Ltd., Mahindra World City). With over 60 years of manufacturing experience, the Mahindra Group has built a strong base in technology, engineering, marketing and distribution which are key in its evolution as a customer-centric organization. The Group employs over 40,000 people and has several state-of-the-art facilities in India and overseas. The Mahindra Group has ambitious global aspirations and has a presence in five continents. Mahindra products are today available in every continent except Antarctica. M&M has one tractor manufacturing plant in China and three assembly plants in the United States. It has made strategic acquisitions across the globe including Stokes Forgings (UK), Jeco Holding AG (Germany) and Schoneweiss & Co GmbH (Germany). Its global subsidiaries include Mahindra Europe Srl. based in Italy, Mahindra USA Inc. and Mahindra South Africa. M&M has entered into partnerships with international companies like Renault SA, France, and International Truck and Engine Corporation, USA. Forbes has ranked the Mahindra Group in its Top 200 list of the World’s Most Reputable Companies and in the Top 10 list of Most Reputable Indian companies. *(Annualised for current fiscal)sursa:
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