Recent months have been witness to the French car maker Renault’s new strategy for the Indian market. Having learnt some valuable lessons, the hard way, Renault today seems poised for a good time in India. Having tried its hand at low cost models with M&M and Bajaj, Renault is going for the premium offerings now. It seems comfortable with wearing the premium tag on its sleeves.
Its sedan offering, Fluence has been received well in the market, selling more than what the company expected. Its second launch Koleos, a crossover between a sedan and an SUV is also a premium offering priced at around 18-20 lakhs. It has also announced launch of its hatchback, the ‘Pulse’. The hatchback will pit it directly against the likes of Maruti and Tata. A fourth launch, an SUV ‘Duster’ has also been announced. So that means Renault will be competing directly with its old rival M&M.
In all the segments in which it’s entering Renault wants to be the premium player. Its top down approach is similar to what Volkswagen did; launching Skoda first, followed by the Jetta and Passat sedans. It was only when the brand was established in the Indian market did Volkswagen go for Polo and Vento models.
Just like elsewhere in the world, in India too, Renault and Nissan are working closely. The alliance has set up greenfield factory in Chennai at an estimated cost of Rs. 4,500 crores. Their hatchback Pulse will be using the same engine as that of Nissan’s Micra. Their combined facility at Chennai will be producing both the models. While Nissan is using the facility primarily for exports, Renault wants to focus more on the domestic market.
What Renault has learnt from India
Renault executives admit that their biggest learning has been that, to work in India you need to be agile, on your feet, ready to adapt to fast changing conditions quickly. After Renault and M&M launched Logan the government announced a dual excise duty structure wherein the cars having length less than 4 meters would be charged at 12% and those above 4 would be charged 24%. It was obvious that the Logan’s length should be reduced to below 4 meters to take advantage of the new law. However, the two companies could not come to decision as Renault did not want to change a car based on a global platform. Tata Motors, on the other hand reduced Indigo’s length to below 4 meters to take advantage of the rule.
Renault execs also cite example of their erstwhile partner M&M. M&M delayed the launch of its ‘Xylo’ when it realized that a dual air conditioner would be a significant factor to generate customer demand. This quick decision making is something that Renault wants to imbibe in its Indian division. The company’s Chennai plant which is spread over 760 acres was completed in 21 months as against a time of 36 months which should have been taken for a plant of this size.
The road ahead
It’s a general view that Renault is a late entrant in the Indian car market. However, Renault officials feel that in fact this is best time to be in India. Renault plans to make India its second largest manufacturing hub in Asia after South Korea.
Renault has set itself a target of acquiring 2.5% of the Indian market by 2013. The long term goal is to reach a share of 10%. Globally Renault has a market share of 10%. It is the second largest car maker in Europe.
The much awaited SUV ‘Duster’ will be unveiled at the AutoExpo 2012 at New Delhi. The model is expected to be available in market by Diwali. Renault also launched its ‘Pulse’ at the AutoExpo 2012.
This is surely a busy year for Renault with new launches, opening of new showrooms, and focus on localization to reduce costs. In its second try Renault seems to have got its game plan right. It will be interesting to see how it can continue to perform this way in the intensely competitive Indian market. For now the future surely seems bright and sunny for the French company.
No comments:
Post a Comment