Renault-Nissan India faces green threat
2 min read . Updated: 07 Feb 2023, 11:14 PM IST
PremiumRenault and Nissan’s joint venture in India is primarily export-oriented, with a favourable cost arbitrage making the country an attractive hub to ship vehicles overseas, earning their global headquarters better margins than sales in the cost-competitive Indian market
NEW DELHI : Renault and Nissan’s plan to jointly develop battery electric vehicles and electronics following a revamp of their global partnership faces an imminent threat in the Indian market from the new alliance of Toyota Motor Corp. and Suzuki Motor Corp. who are fortifying their alternative fuel offerings in the hybrid and electric vehicle segments. The competition is compounded by local automakers such as Tata Motors Ltd, and Mahindra & Mahindra Ltd who have unveiled ambitious plans to capture the EV market.
Renault and Nissan’s joint venture in India is primarily export-oriented, with a favourable cost arbitrage making the country an attractive hub to ship vehicles overseas, earning their global headquarters better margins than sales in the cost-competitive Indian market. Renault India sold 87,000 vehicles in 2022, garnering a 2.15% share of the domestic market, while Nissan sold 35,107 vehicles, giving it a 0.93% share.
A key pillar of the two firms’ new roadmap is to expand its lineup of sport-utility vehicles in India to boost exports. While Nissan sells two SUVs, Magnite and Kicks in India, Renault has a line-up of three passenger vehicles, Kwid, Kiger and Triber.
“We will enrich our lineup with new models in India," Makoto Uchida, president and chief executive, Nissan Motor said in a joint press conference with executives from Renault, Nissan and Mitsubishi. Mitsubishi no longer has operations in India.
“For India and export, Renault Group and Nissan would collaborate on several new vehicle projects including new SUVs shared by both Renault Group and Nissan, and a New Nissan car derived from the Renault Triber," Renault said in a statement.
“It is the only way for Renault to stay profitably in one of the most important markets in the world," Luca de Meo, CEO, Renault said.
While Nissan is also looking to address its lack of a strong EV play in Europe through a potential investment in Renault’s EV unit Ampere, it is currently vulnerable in the Indian market. While the Alliance’s decision to consider introducing A-segment, or entry-level electric vehicles in India might revive its dwindling presence in the country, experts feel the move comes a little too late at a time most competitors, including Suzuki and Toyota, have a significant head start.
“Nissan has had the Leaf EV for many years, but it wasn’t brought to India. In theory, it is a good plan to fire up the A-segment EV segment, (but) the pace of the plan is the challenge," an industry executive said, requesting anonymity
“India is a plus-one market for them, unlike Maruti Suzuki, for who this market is a proving ground. There would be development of a joint platform for EVs, so they don’t have a head start, building a supply chain ecosystem and product development will take 5-6 years, by which time you’d have already seen 2-3 migrations in technology," the person said.
“... an enhanced product portfolio is likely to benefit both partners who have already seen remarkable success with an exciting line-up especially in the A & B- SUV segment. Triber and Magnite’s success in particular is a testament of success of the Alliance and furthermore an electric platform will be a significant shot in the arm for both brands as currently the competitive landscape is quite intense from established players," Harshvardhan Sharma, Head of Automotive Retail Practice at Nomura consulting told Mint.
As part of its Ambition 2030 plan, Nissan will invest 2 trillion yen to launch 20 electrified powertrains by 2026.
