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January 09, 2008

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Renault & Nissan maintain their plans for the greenfield plant in Chennai

M&M realigns manufacturing plans and defers investment in the Chennai automotive manufacturing plant, while Renault & Nissan maintain their plans for the greenfield plant in Chennai.

In February 2007, Mahindra & Mahindra, Renault & Nissan announced their intent to set up a joint manufacturing facility at Oragadam, outside Chennai and signed an MOU with the Government of Tamil Nadu.

M&M has since reviewed its plans, while Renault and Nissan continue to be fully committed to their industrial development plans.

• M&M will utilize capacity available at their new plant in Chakan and other existing plants to meet its medium term requirements and hence shall not participate in the joint plant at Oragadam. Mahindra shall continue its Mahindra Research Valley (MRV) at Chengelpet and MRV test track and tractor plant plans, in Oragadam. It shall simultaneously evaluate a new automotive plant at Oragadam to further enhance its capacity. The Chakan plant owned by Mahindra will manufacture Mahindra as well as Mahindra international truck products.

• Renault and Nissan maintain their development plans for the creation of a new industrial plant in Chennai. They maintain their long term commitment to India, with local development including design, engineering, component outsourcing, manufacturing, etc.

Nevertheless, Mahindra and Renault appreciate their ongoing partnership and continue to have a strong relationship through their existing joint venture Mahindra Renault Pvt. Ltd. (MRPL) that has launched the Logan in India. As of Dec 31,2007, the Logan has captured and 11% market share in the C segment since the launch in May, thus becoming third in the segment. Mahindra and Renault will also evaluate the feasibility of launching the Logan MCV.

The new products that will be manufactured by Renault at its Chennai plant are planned to be marketed by MRPL under the Mahindra Renault brand to be sold through the M&M sales channel.

(January 8, 2008)

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