Home >Companies >Renault banks on Lodgy MPV, new small car to double India sales
Given the competitive intensity in the small-car market and the flurry of models already present in the MPV segment, the road ahead for Renault might not be easy, say experts. Photo: Reuters
Given the competitive intensity in the small-car market and the flurry of models already present in the MPV segment, the road ahead for Renault might not be easy, say experts. Photo: Reuters

Renault banks on Lodgy MPV, new small car to double India sales

Firm plans to corner 5% share of the passenger vehicle market in India by the end of 2016

Mumbai: Renault, part of the Franco-Japanese alliance Renault Nissan, is hoping to double its sales volumes and market share in India by the end of the current fiscal year, a company executive said on Monday. Renault, which will launch a much anticipated small car in India and a few other markets, hopes to make a dent in the competitive segment of cars in the sub- 4 lakh range.

The small car, together with a multi-purpose vehicle (MPV) named Lodgy, launched on 9 April, are expected to boost volumes and market share. The company is aiming to corner 5% share of the passenger vehicle market in India by the end of 2016, Sumit Sawhney, managing director and chief executive at Renault India, said at a press conference in Mumbai on Monday.

In calendar year 2014, dealers of Renault India sold 49,000 units, said Sawhney. At the end of fiscal 2014-15, Renault’s market share in the passenger vehicle market stood at 1.67%, as against 2.39% last year, according to the Society of Indian Automobile Manufacturers (Siam).

Renault also sells the Pulse small car, and the Fluence and Koleos sedans in India. The volumes of these models, however, have been far from satisfactory. As such, the new models will be central to company’s growth strategy in India.

Given the competitive intensity in the small-car market and the flurry of models already present in the MPV segment, the road ahead for Renault might not be easy, says Pradeep Saxena, executive director at TNS Automotive, a market research firm. The targets might be reachable but the company will have to sell at least 8,000 to 10,000 units of the small car for a sustainable run, said Saxena.

“Breaking into the Maruti Suzuki stronghold will be extremely difficult for any new entrant unless they come up with something that appeals to the new generation of car buyers," he added.

Even as small cars drive the passenger car market in India and will continue to do even in the future, their share in the overall market has been declining as utility vehicles gain momentum. The share of small cars in India’s passenger vehicle market dropped to 52% in fiscal 2014-2015 from 68% in fiscal 2013-14, while the share of the pricier sedans and utility vehicles have risen to 41% from 24% according to a 23 February report by brokerage CLSA Research.

Still, Sawhney is not worried.

“We we have managed a decent share in the SUV (sport utility vehicle) segment only with one model, we are confident that the two new models will help us double our overall volumes and help achieve the market share targets," he said, adding that the confidence stems from the success of the Duster.

Renault launched the Duster, the first compact SUV model, in 2012 with sales averaging 3,500 units a month.

TNS Automotive’s Saxena adds that Renault may find it difficult to break away from the positioning of Duster and create a space for itself in the low MPV segment with the Lodgy, where Ertiga and Honda are formidable competitors.

A growth in the overall segment, though, may benefit Renault.

Higher inter-city movement coupled with better road infrastructure, among other factors, will fuel growth of the utility vehicle segment, said Sawhney, who estimated that the segment will grow 10% in the next five years. Utility vehicles, which include SUVs and MPVs, account for 22% of the passenger vehicle market.

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