“We don’t need a bunch of cars in our portfolio which will only fragment the energy and financial resources of the company.”
This message came in loud and clear from Carlos Tavares, Chief Operating Officer of Renault, at a journalists’ roundtable in Chennai on Wednesday.
“We want to be focused on a core model strategy of just 7-8 cars and ensure that each of them is appealing and competitive within its segment,” he said.
From his point of view, whatever Renault needs to bring into the market “has to be a great car which can destabilise competitors”.
Doing too many cars is “a waste of energy and resources” and the French automaker want to stay focused doing great products over the next five years, while creating top-class dealership service standards across India.
Duster’s success
For the moment, the Duster has been the best piece of news and its steady numbers of over 6,000 units a month has catapulted India to Renault’s 11{+t}{+h} largest market globally. Yet, Tavares cautioned that this was not the end of the journey.
“My major concern about India is that we will be enjoying our success a little too much. In sports, it is not enough to win just one championship but also the second,” he said.
The next important step for Renault is to sustain the momentum of the Duster which has helped improve its market share and profitability. “All this is fine but what next? We do not have to grow by two points every year but how do we extend this good work in India for the next ten years? I think that is the question we need to ask ourselves,” Tavares said.
Indian customers
According to him, customers in India understand value which makes doing business here quite a challenge and yet rewarding. Renault is taking its time (with the next product) because it wants to create something that is “special and different which appeals to people” and is still profitable.
As Tavares said, the Duster is the perfect example and it would be ideal to replicate its success here. The market is, however, volatile and “we need to be very careful and work steadily in doing the engineering, design and clinics”.
What next
It is in this context that the entry-car for India could be the next big game-changer for Renault. It is expected to be priced around Rs 3-lakh but there is no indication when it will debut.
When Tavares was here last year, he said it was a little too early to “push the button” and, on Wednesday, maintained that nothing had changed since then as the timing was not “appropriate”.
“In our company, we need to go through different milestones to prepare and study a new business proposal,” he said.
For instance, the pre-contract level involves checking out the objectives and feasibility of the car.
The next step is the contract milestone when revenues and costs enter the picture.
Finally, when the people concerned with the exercise are convinced that the car can deliver these results, then “you push the button and go ahead with the decision”.
“It is still a little too soon for all that and we are still preparing the second step in progressing on the project. It is moving in the right direction but it is still too early in the day to make a final statement,” Tavares said.