Renault India gears up for small car launch2 min read . Updated: 10 Jun 2014, 11:31 PM IST
The car, will be priced at below `4 lakh and is expected to be launched in mid-2015
Mumbai: Renault India Pvt. Ltd, the local arm of the French car maker, is gearing up to launch a model in India’s most competitive small car segment next year, Sumit Sawhney, managing director and chief executive, said in an interview on Tuesday.
The car, will be priced at below ₹ 4 lakh and is expected to be launched in mid-2015. It will be Renault’s second offering in the mass car market—it already sells the re-badged Micra, called the Pulse in India.
The company is planning to expand its dealership network from 125 to 170 by December, said Sawhney, who likened it to “building a runway".
Earlier this year, the company’s joint facility in Chennai with Nissan increased the overall production capacity to 480,000 units per annum from 400,000 units to accommodate the new model. With the new model, Renault hopes to double its marketshare in the mass car segment to 5%, he said.
Global car makers, including Ford India Pvt. Ltd, General Motors India Pvt. Ltd and Volkswagen Group Sales India Pvt. Ltd, have tried breaking into the small car league with global models but have met with limited success.
Puneet Gupta, principal analyst with sales forecast and market research firm IHS Automotive, believes that Renault’s offering in the small car market might be helped by the success of its compact sports utility vehicle (SUV), the Duster.
“They have been able to create a positive perception about the brand with the model," said Gupta, adding that competitive pricing and a refined product will be the key to the success of the small car.
Renault, which sells the Duster, Pulse hatchback, Fluence and Scala sedans among other models in India, has been riding on the success of the Duster.
The model, which has prised open the SUV market with its competitive pricing and positioning since its launch in July 2012, has lately seen sales taper off.
Renault now sells 3,500-4,000 Duster units per month, down from its peak volume of 5,000-5,500. It has ceded some of the market share to Ford EcoSport that sells 4,000-5,000 units and Mahindra and Mahindra Ltd’s old workhorse, the Scorpio, which continues to turn in brisk volumes, selling 4,000 units.
According to IHS’s Gupta, to some extent Duster sales have also been cannibalized by Nissan Motor’s Terrano, which has been selling 1,500-2,000 units a month. With competition in the segment set to increase with Hyundai, Honda Cars India and Mahindra and Mahindra also introducing compact SUVs, it will be tough for Renault to sustain volumes. The new models the company plans to introduce next year will be critical in maintaining the overall volume, he said.
Sawhney, however, is not perturbed and believes the so-called niche created by Duster will hold it in good stead. “The Duster will complete two years next month," he said, adding the company plans to launch a 4-wheel drive version later this year.
This, coupled with the limited edition model launched last week, will help sustain the momentum, said Sawhney.