Renault’s India strategy: small car on the cards

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The Geneva Motor Show is one of the most important auto shows in the world. Global manufacturers use the platform to showcase their future products and strategies. One of the most revered Expos in the world, this is one place where the auto aficionados get more than a fleeting glance of what they’re going to drive in the next couple of years. In its 81st year now, the Geneva show in underway right now and one of the biggest news coming out of the show is Renault top brass’s India strategy disclosure.

Renault didn’t do too well with its mass market Logan in India. Although an accomplished workhorse, the company couldn’t quite figure a good way to sell the product, and ultimately washed its hands off it by selling the brand to Mahindra. The French carmaker has big plans for India though, and failure of one product is not going to deter it from going all-out in one of the most alluring markets in the world.

Kicking off a fresh strategy, Renault’s Senior Vice President, Stephen Norman made some announcement in Geneva which cleared air about the company’s plans in India. The man was humble enough to admit that launching the Logan in India was a mistake. But now that the company doesn’t have anything to do with the model in India, the challenge ahead is to re-establish the brand in the country, and that’s what Stephen put across as his priority quite unequivocally. To attain the target, Renault will have to introduce some of its premium international models to the Indian market to uplift its image as a maker of sophisticated cars.

Renault will kick things off with a premium car, the Renault Fluence, which will be launched in June. The company will play the VFM card in the country and will price the big sedan aggressively to take the fight to the likes of the VW Jetta, Skoda Laura and Chevrolet Cruze. “Fluence saloon will be competitively priced below its Western European rivals”, said Stephen. What this means for a layman is that the big-gish Fluence will be priced a notch below its category rivals, which hints at a price point of Rs 13-14 lakh.

The Fluence sedan will be followed by the Koleos crossover, which again would be a very aggressively priced product in its segment. The Koleos will be pitted against the Outlander, Captiva and the CR-V, but at a price which would undercut these rivals by a substantial margin.

The big news, however, came in the form of the small car plans the French carmaker has for India. The company is planning a B-segment warrior to become a significant player in the volumes segment. The company’s new small car will be based on its upcoming Global A platform and will take on the likes of the Maruti Suzuki WagonR and the Hyundai i10. Slated to be launched in the year 2014, the new car will cater to not only the Indian market but will also be exported to a variety of markets across the world, with the company’s Chennai facility serving as an export hub.

Although there isn’t much clarity on the subject, Renault may also float a sub-brand to badge the new small car with. This may just be a ploy to continue being seen a premium car maker, and use the new logo to avoid being tagged a ‘cheap’ car maker. The car will most likely be showcased at the 2014 Auto Expo, by which time the company will also have at least 70 dealerships in place to support the volumes.

On paper, the strategy sounds great. But Renault neither has great brand value in India, nor does it have the early mover advantage. It’s a bloodbath out there in the Indian market, and the French car maker will have to be spot on with its strategy and execution if it has to taste any success in this increasingly difficult market. For now though, the plan looks good.

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