It was barely a few weeks ago when the Renault group published the list of its top 10 countries for vehicle sales. While France was predictably right on top, the pleasant surprise was India in the eight spot sandwiched between Brazil and Russia. Italy, Germany, Spain, Turkey, the UK and Belgium (ranked No 10) were the others in this coveted list.
The good showing in India must be especially welcome to Renault at a time growth markets like Brazil and Russia are slowing down. It also remains to be seen how the UK market holds out in the post-Brexit era. More importantly, India marks a triumph of strategy where the 800cc Kwid has led the way in catapulting the Renault brand both here and globally. Launched last September, it will soon be joined by its 1000cc sibling that is expected to see sales grow beyond 10,000 units every month.
Beyond the shores of India, Renault recently launched operations in Sri Lanka a couple of months ago. The heady response thus far is encouraging enough for the company to believe that it will emerge the island’s third largest carmaker by the end of this calendar. On the anvil are Nepal, Bhutan and Bangladesh while Brazil and South Africa are part of the bigger global plan.
Sumit Sawhney, CEO & Managing Director of Renault India, believes the timing is perfect for the launch of the 1000cc Kwid whose 800cc sibling has quickly established itself in the market. “We will see our base widen with a peppier option available to the customer,” he says. It has been a dream run for Kwid which opened 2016 with monthly sales of 6,000 units, going up to 7,500 units and now tantalizingly close to the 10,000-unit mark. Sawhney is confident that this will be comfortably achieved with the addition of the 1000cc version in the stable.
When he took charge as CEO in January 2014, he prepared a midterm plan which envisaged a 5 per cent share for Renault by end-2017. It seemed a tall order then for a company whose share was a paltry 2 per cent at that point in time. Today, this has climbed to 4.5 per cent and if the script goes according to plan, the 5 per cent goal could be achieved a year ahead of schedule.
What is equally creditable is the fact that Kwid is part of the most intensely competitive car segments in India where other challengers to Maruti Suzuki have fallen along the way. “With Kwid, we have held our position in this place,” says Sawhney. Between January and July, it was among the top 10 selling cars/SUVs at 6th position in an arena where Maruti and Hyundai are the only other participants. As he adds, there have been some great products launched over the last two years but have perhaps not been as successful.
Sawhney attributes this good showing to the convergence of many ‘right’ factors which ensured that Kwid was successful from Day 1. The first ‘right’ thing was the product where the Renault offering was more SUV in design with high ground clearance with features like a 300-litre boot space being part of the package. Right value was next and pricing was critical where Kwid was spot on target thanks to its 98 per cent local content. “You cannot superimpose a global strategy in India as it is one of the toughest markets in the world,” explains Sawhney. Good mileage contributed to the value quotient as also the low cost of ownership, a trait normally not associated with European carmakers.
Right timing also played a part in the Kwid saga. The Renault team was only too aware that India is the top producer of two-wheeler in the world coupled with low penetration levels for cars. “India will see migration from bikes and scooters but you need an innovative game-changer for this to work. People also want good global, and not cheap, cars,” he says. The second aspect in the timing exercise was to have 205 outlets in place at the time of launch which will now be up to 270 by end-2016. “When we launched Duster, the response largely came from metro cities/capitals while Kwid had people in smaller towns making a beeline for the car,” adds Sawhney.
It was, therefore, important to increase outlets and launch the workshop on wheels initiative in rural India. The last part of the menu was to get the right strategy where digital marketing helped create sufficient hype before the launch. Yet, while Kwid is growing from strength to strength, Duster seems to have lost momentum since its launch four years ago. It was averaging 4,500 units each month through 2013 but is now less than half the number. Sawhney reasons that there were only a handful of players when Duster debuted but this has since grown exponentially.
Things could now look up thanks to Kwid which has reached out to smaller centers. Earlier, people recognized Duster as being bigger than Renault but now the mother brand is back on top with the heady response to Kwid. “Our network expansion will help Duster especially in Tier 3/4 centers where it is still an aspiration product,” says Sawhney. This is it for now, stay tuned for further updates.