Renault big plans for the Indian market

French carmaker Renault is a recognized brand globally and is not unfamiliar in India too. After calling off the joint venture with Mahindra to make the Logan, the company has made an ambitious entry in a car segment that is already teeming with competitors.

It’s first offering in the Indian market – the Renault Fluence, in two variants, a diesel priced at Rs. 12.99 lakhs ex-showroom Delhi and a petrol priced at Rs. 14.40 lakhs.

But is a two variant strategy really enough? CarToq spoke with Sudhir Rao, deputy managing director, Renault India, at the recent opening of a dealership in Chennai. Says Rao, “We wanted our product pitch for the Fluence to be simple, and that’s why we’ve got just two variants. We will see how the market responds and launch new variants based on feedback we receive.”

Renault is right now rolling out its dealerships across the country. It started out with 14 dealers at launch in the third week of May and wants to open 40 dealerships by December in 30 cities and 100 dealerships by the end of 2012 in 55 cities. Through this network, it plans to launch five products planned in the next 18 months.

Sounds like an ambitious plan.

Can the product deliver? The Renault Fluence has some interesting value propositions. It is the largest car in its segment – compared to the Skoda Laura, Toyota Altis, Honda Civic, and Chevrolet Cruze, and offers equipment levels at par or slightly better than the competition. Also read: Petrol Fluence vs. Competition Story

Renault claims interest in the Fluence is fairly high, but hasn’t disclosed numbers yet. Says Marc Nassif, managing director, Renault India, “We will disclose the booking numbers only after we’ve finished with the dealership opening in Pune, in the next couple of weeks. The customer response to the Fluence has been encouraging.”

The company is investing about Rs. 5,000 crore in India. This includes the Renault Design Studio in Mumbai, a Renualt Logistics Centre in Pune, and Renault Nissan Engineering in Chennai with over 2,000 engineers, along with the plant that it shares with Nissan that has an installed capacity of 400,000 cars per year.

Renault plans to roll out four more products from here before the end of 2012. This includes the Koleos SUV, which will roll out in October this year and will be competing with the likes of the Skoda Yeti, Chevrolet Captiva, Toyota Fortuner, Ford Endeavour, Mitsubishi Outlander, Honda CRV and Hyundai Santa Fe. Didn’t we say Renault’s getting into a crowded market? It definitely needs a couple of tricks up its sleeve if it wants to succeed in each segment.

Rao says Renault’s experience with the Logan has taught them a few things about Indian customer behavior and the need for the company to develop a strong local vendor base and supply chain. The company will also focus very strongly on branding, so much so, it won’t even share space with its alliance partner Nissan.

“You will never see a Renault-Nissan co-branded dealership anywhere in the country. Both companies will have individual branded dealerships,” says Nassif.

Next year’s launches also include another sedan and the Renault Duster SUV which will compete with the Mahindra Scorpio and Tata Safari. Also read: Rs 7 Lakh SUV for India Story – Renault Duster

The focus, however, will be on a small car for India based on the Nissan V-platform on which the Nissan Micra is built. This last model is going to be a volume driver for Renault and it wants to make sure it has everything tied up before the car launches. And no, it’s not going to be the Renault Clio as previously speculated.

Says Nassif, “We will be launching one vehicle based on the V platform in 2012. The small car will be a ‘Made for India’ model and will not have anything to do with our global small cars.”

Renault also wants to make service a differentiating factor from its competition. The company is offering a 4-year / 80,000 km warranty with the Fluence, as well as three free services up to 20,000 km. It’s aggressively setting up local sourcing for parts to make sure that spares are competitively priced.

Renault got a head start in brand recognition, thanks to the Mahindra Renault Logan (now called the Mahindra Verito), but it needs to build it further from there. Who said late comers had it easy?