The Hindu Business Line : Renault puts India car plans on the fast track

Mumbai, June 22 French carmaker Renault has completely recast its plans for India as part of a new, aggressive approach that will see it producing cars in its Chennai plant by 2011.

“It is important for us to speed up our activities in India because we do not have the luxury of time now. I know a step-by-step approach is always seen as being sensible but it is equally important not to stop. There is also no question of abandoning the Indian project,” Mr Marc Nassif, Country General Manager, Renault in India, told Business Line.

According to him, the company has a clear roadmap for the future and is here for the long haul. “We have small cars, sedans and sport-utility vehicles. It is up to us to rebuild all over again after checking out which model could be the best bet for India. Issues of economic viability and volumes will be part of this exercise,” he said.

Mr Nassif is also Deputy Managing Director of Renault Nissan Automotive and Executive Director of Renault India.

May use Nissan base

The Chennai facility is a joint venture of Renault and Nissan with the latter scheduled to roll out its first compact hatchback next year, followed by a notchback in 2011. Renault had frozen investments for its assembly line but is now considering the possibility of using the Nissan base instead.

“We can take a Renault car on the Nissan platform in Chennai and this is an option that could be actively considered. This is a Renault-Nissan facility and a whole lot of things could happen. It is a great manufacturing system,” he said.

In some global facilities such as Brazil and Mexico, there are huge synergies between the two companies in platform sharing and this could be replicated in Chennai too.

Lessons from Logan

Mr Nassif admitted that the Logan was a positive, though painful, experience from Renault’s point of view simply because its sales were hardly anything to write home about. “We are not blaming anybody but it has pushed us to rethink on the issue of what Indians are after and what they really want,” he said.

For instance, Renault discovered that roominess was not really considered a value in the Indian context because people were not ready to pay for it. “We are re-reading the Logan story, the evolution of the market and what our renewed strategy should be. The key is to build the Renault brand in India because there is a lot of work ahead,” Mr Nassif said.

For the moment, the company’s brand recall is limited to the Mahindra-Renault joint venture which manufactures the Logan at the Nashik plant. “We still have no idea how durable this is from the viewpoint of Renault alone. We must rebuild the brand in terms of new cars, values etc,” he added.

Renault is also confident that if it does have a “good idea of a car on the Logan platform”, it could be used in Nashik to fill up capacity which is still underused. However, the criterion is for the numbers to add up in terms of economic viability.

“This is particularly important after the Logan experience and in view of the fact that we are in the midst of a global slowdown. There is no point throwing good cash all around. We have the flexibility within the plant but the choice of car is critical,” Mr Nassif said.

Renault and Nissan also have a joint venture with Bajaj Auto for an ultra-low cost (ULC) car that is scheduled to debut in 2011 at a base price tag of Rs 1.5 lakh.

“Renault is committed to the project and wants it to become a reality. We are still working on the concept and have not reached a stage of complete maturity yet. We have some ideas on the ULC and need to see if these are viable and sustainable,” he said.

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