Companies

Rural market has tremendous growth potential: Renault India CEO

G Balachandar Chennai | Updated on July 23, 2020 Published on July 23, 2020

Venkatram Mamillapalle, Country CEO & Managing Director, Renault India Operations

India, one of the key markets for Groupe Renault, has been a part of the French auto major’s top 10 global markets on a cumulative sales basis for the past few years. Renault India has come out with some exciting products (Duster and Triber to a name a few) that have become game-changers or created its own sub-segments. Venkatram Mamillapalle, Country CEO & Managing Director, Renault India Operations, spoke to BusinessLine about the challenges the company faces, its 360-degree approach on its product range and the efforts to enhance capabilities to reach more customers in India. Excerpts.

How has the restart phase for Renault India been?

The Indian automobile industry has been severely impacted and the obvious outcome is a sharp decline in sales, shrinking of the industry volumes and major disruptions in supply chain logistics and manufacturing. For us at Renault, the second quarter of this calendar year (April-June), has been primarily about safeguarding the interests of all our stakeholders. When business gradually opened post-lockdown around mid-May, our first priority was to ensure that we have the necessary safety and hygiene measures across all sales and service touch-points. We ensured special care to sanitise all our facilities. There were multiple training programmes, protocols and processes put in place to monitor the execution of our customer-first initiatives and efforts, as a part of our ‘Welcome Back’ initiative.

What have been the key initiatives to attract buyers during this period?

We announced a host of attractive offers. These include a ‘Buy Now Pay Later’ scheme where customers can buy a Renault car and start paying EMI after three months of purchase.

We also introduced cash offers, exchange benefits and finance at a special rate of 8.25 per cent. We complemented these offers with additional loyalty offers for existing customers. We significantly enhanced our digital capabilities and portfolios with online booking options and other interventions. Customers can book cars from home on the Renault India website or the MyRenault App at a nominal booking amount, and can also get loan approvals remotely from Renault Finance.

On the product front, we launched Triber AMT during May-end and then more recently, we have added a new RXL variant with a BS6 compliant 1.0L powertrain in MT and AMT versions to the Kwid range. Both these products are volume drivers for Renault India and have helped us to hold our position in these challenging times.

For Renault, although there has been degrowth in the wholesale numbers in H1 2020, we have managed to get retails back on the growth path, with our June 2020 retails being higher than June 2019.

There is gradual optimism coming back to the automobile industry and we are all hopeful that we will collectively navigate through these challenging times.

How has Covid-19, and the disruption it caused, changed your plans for India?

We have some of the most popular global products in our portfolio, led by Kwid which is one of the top cars for the group globally. Triber continues to garner an overwhelming response and has established itself as a breakthrough product. Duster keeps building on its legacy and sets itself apart as a true SUV, with superior capabilities and enhanced features.

We will soon launch Duster with an all-new turbo engine, making it the most powerful SUV in its segment. Furthermore, we are also readying an all-new product for the India market.

Is it the new sub-4 metre SUV?

Yes. True to our strategy, the new offering will be a disruptor that will cater to the evolving customer expectations, while establishing the expertise of India’s design, technical and manufacturing prowess on the global map.

We are looking forward to launching our all-new car for India as soon as the situation eases. This will also be aligned as per our strategic business plan, whilst ensuring that all the necessary pre-requisites for successful car launch in India are in order.

After the success of Triber, has Covid-19 impacted your plans to consolidate the brand’s position in the Indian UV market?

Triber continues to garner an overwhelming response and has established itself as a breakthrough product. With the recently launched Triber AMT, we hope to further build on the success of this truly versatile car. Looking at the evolving customer preferences, AMT technology is becoming a popular choice across segments. It is very motivating to see the outstanding response from customers.

Is Renault India still sticking to its plan of ‘no-diesel in BS-VI era’?

Yes, all our product offerings will be in petrol options.

With some prospects seen in rural and semi-urban markets, how are you planning to revive sales in the near term in these markets?

Recovery is largely dependent on the different markets opening up, and relaxation of regulatory (lockdown) restrictions. However, it’s a very fluid state now.

From a mid-to-long-term strategic point, we see tremendous potential in the rural markets for our growth. Last year, we initiated an activity which targeted 330 rural towns across the country. This is a new avenue that we are aggressively pursuing with an innovative and comprehensive strategy. We have also initiated a special project - VISTAAR - to amplify and grow our presence in rural India and our dealership teams have recruited specialised sales consultants to reach out to rural markets.

In terms of contribution to the total sales of Renault India, presently, rural markets contributed about 25 per cent in June 2020 quarter, up from 19 per cent in the preceding quarter. This has been achieved through strong product acceptance and focussed efforts invested across the rural markets.

Together with urban markets, we are seeing a growing interest in our customer-centric efforts across rural India, along with increasing adoption of digital communications and platforms in rural markets.

What’s Renault India’s growth outlook for 2020?

We look at 2020 and the mid-term with cautious optimism and hope. We are focussed and committed to our India strategy and are equipping ourselves to deal with the new normal. The journey back to the pre-Covid growth rate will comprise strategic cooperation and resilience across the value chain.

We have used this time to strengthen our strategy and operations. We are putting in all our energies and efficiencies on consolidation, with the approach and intention of bouncing back stronger.

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Published on July 23, 2020
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