It was a jaw-dropping price for the Kwid except that when Renault India made the announcement in late September, there were no cars in dealerships.
Yet, customers queued up for the new compact even as it began making its way into showrooms only a good three weeks later. Today, the order book tally is comfortably over 70,000 and growing which explains why Sumit Sawhney is pleased as punch.
Big contender In hindsight, was this move a gamble? “It was important for us to hit the bull’s-eye especially in a country where the right product and timing matter. This is a period when customers make purchase decisions and it was critical for the Kwid to be considered,” says the Country CEO and MD of Renault India.
Connecting with the market was priority and the team pulled out all stops with innovations like the virtual showroom and Kwid App. With its entry price point of ₹2.56 lakh, the car was taking on Maruti Suzuki, the monarch of the small car space.
What is particularly significant to Sawhney is that the bookings are still coming in which means the sprawling Renault-Nissan alliance plant at Chennai is in ramp-up mode. Sure, these are not the easiest of times with the recent deluge but it is only a matter of time before operations are back on track and deliveries resume in right earnest.
Nearly a third of bookings are from first-time buyers, graduating from two-wheelers, while yet another third have decided to replace their existing cars with the Kwid. The final one-third comprises customers who have opted for the Renault offering as their second family car.
Women account for 15 per cent of the order book and this number could grow in the coming months. Over 60 per cent of customers are salaried people and demand is coming in from all age groups across metros and small towns.
As Sawhney says, the Indian customer seeks a lot of trust in a manufacturer and this is where Renault has clearly hit the sweet spot with its compact car. “For us, India is an important market and the Duster was the first big success. We wanted to establish a presence in some segments by creating sub-segments within them. The Duster created one in SUVs and the Kwid is a game changer too,” he adds.
Tough competition The job on hand was to deliver a car which was attractive, innovative and yet affordable. Its manufacturer knew only too well that India is one of the most competitive car markets which meant it had to offer something really special. “The Kwid is part of the toughest car segment in the country and the mantra was to bring the right product at the right time with the right features, space and value,” says Sawhney.
In short, the priority was to deliver a big small car to the customer. It also had to be a true international offering whose success in India would decide the future course of action in other markets. This was an opportune time too as the sub-₹3 lakh category occupied by the Maruti Alto, Hyundai Eon and Tata Nano needed a fresh touch. “The Kwid has been able to redefine the segment and embodies the best in attractiveness, design, features and price. While the Duster was a game changer in SUVs, the Kwid likewise has created new benchmarks in the compact space,” says Sawhney.
What also works in its favour is the value proposition which goes beyond its price tag. With a localisation level of 98 per cent, the Renault compact offers competitively priced spares which are almost 19 per cent lower than the top gun in this segment. Fuel efficiency at 25 kmpl is another draw, all of which makes up for an affordable basket of goodies.
The heady response to the Kwid has been terrific news to dealers and vendors who now have the volumes for their business. Morale within the organisation is also high and, as Sawhney reiterates, this is just the beginning of a bigger story.
Thanks to the Kwid, Renault’s India ranking has gone up a notch to the eighth position. And as numbers grow, the country could be part of the top 10 list for the French carmaker after falling behind over the last year. “Renault is just four years old in India and this is a tough market. We started with 14 outlets and on January 1, 2016, we will have 205 going up 240 by the end of the year,” says Sawhney.
In this happy backdrop, there could be some concerns. The MPV (multipurpose vehicle) segment has been in free fall in recent months and the casualty as a result has been the Lodgy. In all fairness, this has hit other MPVs too which the Renault India chief believes is a result of the economy’s prevailing health.
“I do believe once the economic situation improves, demand for these people movers will also go up. An MPV is for the rational, and not emotional, buyer and it will take time to grow numbers,” says Sawhney. Renault has recently positioned the Lodgy in the growing fleet segment which could do the trick in boosting volumes.
Likewise, efforts are on to increase Duster sales which are now down to 2,000 units each month from the highs of the last couple of years. Market response to the recently launched Duster Explore has been “very good” and the next step is to leverage the Kwid’s network and access small markets.
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