Renault small car for India post-2011

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A Renault Koleos at the Expo in the Capital.
A Renault Koleos at the Expo in the Capital.

“We will keep the Logan and our own relations with M&M intact. There is some tweaking to do in the business structure.”

Murali Gopalan

New Delhi, Jan.6

French carmaker Renault will launch a compact car in India after 2011 as part of its renewed product strategy for this market.

“The small car is part of a big volumes segment in this country. We have the entry option in the form of the ultra-low cost car but are talking of the really big compact segment. We hope it will be launched after 2011,” Mr Katsumi Nakamura, Executive Vice-President and Leader of Renault's Asia Africa Management Committee, told Business Line.

Almost every global carmaker in India, right from Ford and General Motors to Volkswagen, Toyota and Honda, is keen on building a presence in the small car segment now dominated by Maruti, followed by Hyundai and Tata Motors.

Renault, likewise, sees a business opportunity here though the top priority this year will be to create a strong foundation for India with the launch of the Fluence sedan and the Koleos sports-utility vehicle from its Chennai plant in the next 18 months.

“India is strategically an important market for Renault. We came here five years ago and I cannot say that the stint has been successful. However, this year we have started the next step to stage a revival in this market,” Mr Nakamura said.

Renault had joined hands with Mahindra & Mahindra to produce the Logan sedan at Nashik. Big numbers were expected but the script did not quite go according to plan. In the meantime, Renault also kept on hold its product investment plans for the Chennai plant being jointly commissioned with global ally, Nissan.

“Renault is now back on track in India and will bring products for a host of segments to keep customers interested. The show should start in 2011 and our production base for those cars will be Chennai,” said Mr Marc Nassif, Managing Director, Renault India. The company is also expected to soon make public its retail plan for the new cars.

According to Mr Nakamura, despite its tepid showing, the Logan project at Nashik would continue to be relevant. “We will keep the Logan and our own relations with M&M intact. There is some tweaking to do in the business structure. I believe we can find a solution and are studying many options though the solution could take a little time in coming,” he added.

Till then, the partners have decided to trim costs in the joint venture by capping monthly numbers of the Logan at 500 units. There have been difficult issues to be reckoned with in terms of the costly euro (which makes imports expensive) and the differential excise duty for large cars.

The Renault-Nissan alliance is also working with Bajaj Auto on an ultra-low cost car scheduled to roll out of a plant near Pune by 2012. Initially, it was seen as the challenger to the Tata Nano from the viewpoint of price since the base version will be retailed at around Rs 1.5 lakh.

However, indications are that the partners are now gauging customer reaction to the Nano which has been on the roads for some months now. “We are trying to change a little bit our positioning of the ULC where it will not compete directly with the Nano but build a slot of its own,” Mr Nakamura said.

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(This article was published in the Business Line print edition dated January 7, 2010)
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