Renault committed to bringing low-cost car in India

Renault committed to bringing low-cost car in India

New Delhi: French carmaker Renault on Sunday said it is committed to bringing in a low-cost small car as the concept is still relevant not only in India, but globally also, despite differences with its partner Bajaj Auto.

Renault has been working with India’s second largest two-wheeler maker Bajaj Auto to launch an ultra low-cost car, which was initially tagged to be around $2,500 (about Rs1 lakh), in the domestic market by 2011 and is, at present, reportedly facing difficulties on host of issues such as branding and price point.

“The entry price point, which will be $2,500 is still very important for the market, not only for India, but also for lot of emerging markets. We have to bring in the car with basic feature, basic functionality at a very affordable price," Renault chairman and CEO Carlos Ghosn told reporters here on the sidelines of India Economic Summit here.

He, however, declined to comment if the proposed small car would stick to earlier announced price point of $2,500.

“..(whether) it is going to be $2,500 or $2,800 or $3,000 (not sure)... (but) I am stuck into making customers happy and satisfied. But it is not going to be very far of ...," Ghosn said when asked if project is stuck due to differences on the price of the car with Bajaj.

India’s largest auto maker Tata Motors, earlier this year, introduced Nano, considered to be the world’s cheapest car, with a price tag of just over Rs1,00,000.

“I know that some of our competitors like Tatas has already put the car in the market ... its moving on. We will continue to work to bring in this car (with Bajaj) into the market," Ghosn said.

Bullish on the Indian market, he said: “I am very optimistic about the growth of the market in India. When you move from two million cars a year to six million cars a year, this is very appealing to global carmakers."

He said India’s capability in frugal engineering and frugal product planning becomes key on the backdrop of the global downturn and shift towards small and lower priced products.

“The products that are selling the most are the products affordable but with just necessary features and I think Indian engineers are second to none in this segment," he added.

On the issues that Renault was facing in India with its various partners, he said: “I never thought that coming to India will be right at the first time. Nobody get it right in the first time in any country, and particularly in a country with long tradition and long history like India."

So we would be naive to think that everything you are going to undertake, you are going to be successful in the first time. But we have the patience, we have the determination and we have the focus, and hopefully the modesty to recognise when things are going well and when things are not going well and to learn from them.“

He admitted that fall in sales of Logan, a product of Renault’s joint venture with Mahindra & Mahindra, was a cause of concern and the company is talking with M&M on ways to overcome the situation.

Ghosn said the plant at Chennai, where Renault and Nissan had jointly announced to invest Rs4,200 crore to produce four lakh cars annually, is likely to start production in the early part of 2010.