Renault to launch small car to compete with Alto and Eon by 2015

French car maker Renault is planning to launch a small car to take on cars like the Maruti Suzuki Alto and Hyundai Eon by 2015.

The French car maker is thinking in line with its Japanese partner, Nissan which has planned to launch low cost cars under the Datsun brand name in emerging markets like India, Indonesia and Russia.

Renault has appointed Gerard Detourbet, as the alliance managing director for developing the upcoming small car. Detourbet is known in-house, for his expertise in developing low-cost cars.

“We are the most successful car maker globally in entry-level cars as our design cost is the lowest and this is linked to the Indian preference for frugality,” Carlos Tavares, chief operating officer, Renault, was quoted as saying by The Hindustan Times. He added that Renault is trying to evaluate an entry-level strategy for emerging markets and the company is eager to kick off with India.

Expect the Renault global small car to debut in the Indian market and later to be exported to other markets. Also, to keep the costs under check, Renault may share its small car components with the Datsun brand cars.

At present, the most affordable cars from Renault and Nissan are the Pulse and the Micra respectively which are priced in the Rs. 4 lakh – 6.5 lakh range. The majority of small cars sold in India have a price tag in the range of Rs. 2.5 lakh – Rs. 4.5 lakh as models such as Maruti Suzuki Alto, Maruti Suzuki Wagon R and Hyundai Eon which belong to this price range sell at more than 10,000 units per month. Keeping this in mind, over the next few years, expect the Renault-Nissan-Datsun alliance to dish out many small cars with low prices targeting the masses.

The Tata Nano is a classic example, of how low cost car projects even when offered by an established Indian car maker like Tata Motors can end up struggling on the sales charts. That said, it will be interesting to observe the market success of the Renault-Nissan-Datsun low cost cars as these brands are less popular and are yet to establish their sales and service network in tier-II and tier-III cities where the demand for low cost cars would likely be high.