Auto focus

Renault re-draws priorities in new India blueprint

Murali Gopalan | Updated on February 13, 2020 Published on February 13, 2020

Fabrice Cambolive, SVP, Chairman of AMI-Pacific, Groupe Renault

Aggressive global play, electric mobility and sharper focus will be the growth mantras

Fabrice Cambolive grins as he lets me on to a little secret.

“I will give you a scoop on Venkat: I told him some weeks ago to go to South Africa,” says the SVP, Chairman of Africa-Middle East-India Pacific Region, Groupe Renault.

The ‘Venkat’ he is referring to it is Venkatram Mamillapalle, seated to his left in the Renault interview room at the Delhi Auto Expo pavilion. Mamillapalle is Country CEO & Managing Director, Renault India operations.

Cambolive then dwells on greater length on what he spelt out to his India chief. “I want you to go there because you are the MD of India and South Africa is one of your best customers, which buys the Kwid. Now, the Triber will also be launched.”

From Cambolive’s point of view, it is important for Mamillapalle to “go there to meet them (customers), listen to what they want and speak to all the Indian people living there”.

After all, Indians were one of the first communities in the country, and one of its famous global brands, Mahatma Gandhi, was also part of the South African landscape.

“You know what? Not only was Venkat happy to go there but the South African team (at Renault) is delighted to welcome the MD of India,” continues a clearly elated Cambolive. The launch of the Triber is scheduled for Friday and it is clearly a big moment for Renault India.

Growing role

Cambolive adds good-naturedly that this trip is not intended solely to “make a kind of social relationship” but for the India leadership team to be even more conscious of its growing role in the region that it is in charge of.

“Venkat will have a responsibility for developing exports to all countries and South Africa is one of the best. I want him to be very clear on our service quality,” he says. This includes key ingredients like trust, customer expectations and different aspects “we don’t touch in India”. As Mamillapalle quickly adds, this is basically about customer relationship.

“We have five million Indians living in South Africa, which may not be huge (compared to India) but it is still an interesting number,” says Cambolive. Beyond South Africa, there are other countries in the ASEAN region as also all right-hand-drive markets which could “be interested in our line-up” from India.

Cambolive drives home the point that exports in the real sense means going beyond “just sending out some cars” to a more profound understanding of other countries. It also means being capable of having a “win-win relationship in terms of human resources management”.

He strongly believes that India’s geographical positioning is yet another aspect going in its favour. “It is the only country where, in terms of balance and positioning, we can look on the right for ASEAN and to the left for Africa,” says Cambolive. He then throws up an example of Nigeria, which has a sizeable population. Renault retails four models in this African country, of which two come from Morocco and Romania and the other two from Brazil.

One of these is Kwid, a popular brand in India, too, which makes its way from Brazil to Nigeria because it is a left-hand-drive version. Now, if India were to also make the LHD Kwid at the Renault plant in Chennai, the country could well emerge a sourcing hub for Nigeria.

Of course, this is only a hypothetical example but there is really no telling what could possibly happen in the not-so-distant future. Likewise, there are interesting dynamics that could happen with free trade agreements, especially with countries like Mexico.

From Cambolive’s viewpoint, the universe of exports encompasses shipping out the platform, methodology, process etc. “Exports can include the gearbox, powertrain, components, tooling etc and this goes beyond a complete car. Part of the huge success of Kwid in Brazil is due to our experience and transfer of knowhow and technology from India,” he explains.

According to Cambolive, India is really the hub of the region with “huge opportunities” in terms of development. He is excited about the vast talent that the country offers in R&D, engineering etc, which has seen Indians make their way to other Renault operations worldwide.

Yet, he is realistic enough to admit that this is going to be a turbulent decade for the automotive industry with a whole lot of issues to deal with. Within India, the competitive landscape is also changing with the advent of Chinese automakers like SAIC, Great Wall Motors and Changan Automobile.

“Yes, I would say automotive is an aggressive industry and we have to live with that — not only because of competitors, but, if I take my region of 100 countries each morning, you have got bad news or complicated cases to manage,” says Cambolive.

These could be in the form of new regulations, political changes or even the latest shocker in the form of the coronavirus outbreak in China, which is threatening to cripple the global automotive supply chain. “There is no question that it is an industry which is coming now in a transition phase,” he adds.

In this tumultuous backdrop, it is always important to “have some golden rules” when manufacturers are contemplating some changes to their business models. One, as Cambolive articulates, is not to enter into too much diversity. “If you want to enhance too many things, you will not be able to manage it. I think you have to make your choices and priorities,” he cautions.

Hard choices

He then cites Renault’s India case where, nearly 2-3 years ago, the company made some hard choices “when we decided to give up diesel for instance, even while taking into account that customers here like diesel”.

It was a very hard decision, concedes Cambolive, but it was important to focus on the one-litre powertrain as well as the one with turbo and AMT. This enabled “us to have a very competitive offer on Triber”. It was a choice that Renault exercised and thus far the good showing of the vehicle vindicates the decision.

Likewise, when the company opted to give up some models, it was intended to focus harder on new models developed on the new platform. “The best way to answer this aggression (from competitors and elsewhere) is to be very focused on your priorities,” says Cambolive.

The second golden rule, he says, is to always play local. This becomes especially important in a price-sensitive market like India where it is almost impossible to succeed if the localisation levels are below 90 per cent. “We have to be good in powertrain, body parts etc and you also need to bet on local talent,” explains Cambolive.

Exports, which have been dealt with earlier, are the next critical pillar and this is where Renault is hoping that its renewed focus on India will pay off in the coming years. “Yes, I am actually happy with the work of the team here considering that the last two years were not so easy,” he says.

The choice to go ahead with Triber could have been perceived as risky since almost everyone was launching SUVs. “We decided to launch a different car and are pleased that there is a level of success now. We never knew this would happen and the outcome thus far has been impressive,” says a pleased Cambolive.

Nearly 40 working groups were put in place to prepare for the launch of Triber and this was not only in the arena of marketing but also in defining the products, its key USPs, what levels of flexibility “we should have in the car”, and so on.

“That is why we are satisfied but that is not enough. Just being satisfied does not mean that we will be sleeping. In India, you cannot afford to sleep,” he laughs even while sending out a clear message that complacency will not help Renault’s cause in India.

“We are living now with the animation…the lifecycle management of the car,” says Cambolive. Pictures of the Triber, on display at the Expo, were sent to Laurens Van Decker, Director of Renault Group Design, to promote the new automatic version’s arrival. “I told him that I can count on him to animate, in terms of design, Triber all over the next month and years,” he says.

The conversation veers around to the next hot topic in India, and the rest of the world, which is electric mobility. “If we need to do this in order to be sustainable, we have to localise. We must take the best from other countries in terms of price and local content to generate demand in India,” says Cambolive.

He admits that it will take time but Renault is working on a project that will hopefully be ready in the next couple of years. The goal is an affordable mass market electric car which can sell good volumes. It is more than likely that this will be an electric version of the Kwid on the lines of what was launched in China recently. “How do we make volumes and stay competitive? First of all, we can bet on our existing line-up (like Kwid) which has very big awareness and familiarity. Two, we can benefit from our EV experience in Europe and China. Three, we must demonstrate our knowhow in terms of localisation for EVs,” elaborates Cambolive.

It is no coincidence that the choice of Mamillapalle was made keeping in mind that he comes “from the purchasing family” where he has many years of “great experience”.

Renault has had two big success stories in the form of Duster and Kwid in India but knows only too well that the key is to sustain the momentum. With competitive rivals like Maruti Suzuki, Hyundai, Kia and the Chinese majors, the going will not be easy.

“We have 600,000 customers here which may not be huge but good for an European carmaker. It is also important to be constant in terms of quality,” says Cambolive. Triber has set the pace for the new growth script and the team in Chennai is pulling out all the stops to ensure that there are no glitches en route.

“It is a world that is changing everyday and where many decisions are being taken on a country level,” he says. The focus, therefore, is to have one foot local and bet on people in each cluster. It is important to have very good local talent to adjust to local rules and have a foot in other countries to manage this efficiently, signs off Cambolive.

Published on February 13, 2020
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