Renault India has come back into the limelight with the new Kiger. The sub-compact SUV fills a gap in Renault’s portfolio. It also reaffirms the brand’s made for India strategy. But what about some of the ageing vehicles in its portfolio — the Duster, for example. Venkatram Mamillapalle, Country CEO and Managing Director, Renault India Operations, spoke to BusinessLine about the company’s plans for the future. Not one to mince words, Venkat also talks about the lack of an EV ecosystem and the current shortage for electronic components that is threatening the auto industry’s growth potential. Excerpts:

What are your expectations from the Kiger? And what will be its differentiators?

Most of the feedback about the Kiger has been good and positive. And I believe we are now in the right game and, in the right segment, more importantly, given that 50 per cent of buyers are only considering SUVs. We were not there and are slowly making in-roads into that.

I wouldn’t call the Triber as being part of the same segment, even though it is built on the same CMFA+ platform.

The most appealing part of the Kiger, for me, is the smart cabin. The way the tall centre console divides the driver and front passenger was a carefully thought out feature. The choice of powertrain, including AMT and CVT gearboxes, should cater to a wide section of buyer expectations. We are known for creating space inside the cabin and that can also be seen in the surprising amount of luggage room in the Kiger’s boot.

Do you think with the Kiger you’ve topped out the possibilities of models built on the CMFA platform?

Yes, we have a range of India-centric cars in the A and A+ segment today. We will bring facelifts to all the current CMFA and CMFA+ platform models. We cannot expand in terms of dimensions using the same platform. And the only body style missing on the CMFA platform is a sedan and we don’t have any plans for it. The sedan market is diminishing and doesn’t look like this is going to change. I don’t think we will bring any more new models on the CMFA platform. We will focus on vehicles higher up and if I was to choose a specific vehicle, it will be the Duster replacement. It is a global model and though we haven’t seen major changes in the Duster, hopefully soon we will be expanding in that category also. Obviously working with a range of small cars means that we have wafer-thin margins. And to become more profitable we need to move on to bigger models.

We also have the CMFB platform and that can cater to the C segment. Many of the new Renault vehicles are being built on this platform, which is an evolved architecture. The replacement for the Duster will use this platform. We will take care of the top-hat, and that work will be done by RNTBCI (Renault Nissan Technology & Business Centre). We want to retain the Duster brand forever, because of the close association that the Renault brand has with this vehicle. So that’s our wish, but lets see how it pans out when we do plan the replacement for Duster.

What is the reason for the short supply of electronic components like chips? Are car makers grappling with a shortage of parts?

I would say that this has been driven by the work-from-home (WFH) situation of the last few months. People have been buying more mobiles, tablets, laptops and the like that are all competing for the same sort of chips that also go into a car’s control and management units. This has led to a widening of the shortage during the lockdown. And the bounce back by the automobile sector wasn’t expected to happen so quickly. So, the increase in demand from both segments has only made it worse.

Further a couple of chip plants are yet to come back on stream, after being hit by the tsunami, including one in Taiwan. Hope they’ll start operations soon and restore normalcy to the supply situation. With the vaccine and WFH scenario changing, the demand for personal electronics may come down and help improve supplies to the automotive OEMs. It is not possible to build new capacities in the short term. So it will be a struggle until some form of optimization can be done in the supply situation. That’s probably a couple of months away.

We are not affected much by this short supply currently, but we are not very far away when this could disrupt our production schedules too.

Peculiarly, we in India are also going through a steel shortage. And the advantage is being taken by the steel mills who’ve raised prices. Unfortunately changing the sourcing strategy is not easy given the need for validation and extensive testing of the newly sourced steel. Some of this has also been driven by the pandemic and the consequent labour shortage at multiple stages of steel manufacture, including mining.

How different or unique do you expect the Kiger buyer reaction to be compared to its platform-sharing counterpart?

We are creating value, and not loading it with features that will raise the price without offering any practical benefit to the consumer. Yes it is an alliance platform, but the differentiation is huge in terms of design, materials used and network accessibility. Expansion is particularly high in the rural markets where we already have about 500 RDSEs (dealer sales executives) and another 500 will be added this year. And this will generate employment locally in these towns. We expect our brand recognition to improve in all these new geographies. And our penetration in these markets, especially for Kwid and Triber, has been extremely fruitful for us. We will be entering rural markets for the Kiger too, but we have to wait and see how it is accepted in these regions.

The Kwid EV and the recent rumours surrounding it suggest you have postponed the launch. What is the status with this model?

Bringing an EV is very easy; we already have the technology and the cars. But in the absence of an EV ecosystem it just doesn’t make sense. And by that I don’t just mean the charging infrastructure, it also includes issues like trained fire and rescue services. The government regulations and the EV ecosystem need to develop simultaneously and in my opinion this could provide an enabling environment by 2024. Every OEM needs to take the responsibility of training the government agencies based on its specific EV models.

I don’t want to bring an EV and just launch it in the market here. I don’t need to test the waters because we have proven products. When the market is ready and the regulations are in place, we can bring an EV easily.

The Kwid EV is not coming into market this year. It just doesn’t make economic sense for the buyer to pay more than twice the price of the same ICE model. And then the ecosystem is also non-existent. We showcased the Kwid EV prototype at the Auto Expo and even tested three of them, but it doesn’t make sense to bring to market before the economics can be worked out.

How is the Duster doing in the market now, after so many new competitors have joined the fray? And is the Renault buyer increasingly choosing automatics?

First of all, the Duster 1.3 has seen an amazing response from the market. Highly appreciated, though volumes continue to be only 400-500 units a month. It was lower than that before the petrol 1.3 arrived. We have to see how long this can hold out before the new product comes in.

The normal volume break up between the automatic and the manual has been about 15-20 per cent, much of which comes from the cities. The average buyer profile for our automatics is either women or men over the age of 40 years. This was the statistics for the Kwid and the Triber. For Kiger we will know over the next few months. In my opinion, the preference for autos will increase. In the next 3 to 4 years time span, automatic transmissions will see a nationwide penetration of 35-40 per cent. Post-pandemic we will see an acceleration in preference for automatics.

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