Renault, the French automaker which enjoyed runaway success with its 2 models in the initial phase is now struggling to keep pace with volume growth for the past 2 years. To revive its sagging volume it plans to roll out 4 models, including two all-new ones, over the next 15-18 months.
Renault has been losing market share and it dropped to 2.3% in FY19 from 4.43% in FY17. The sale of all models except entry-level model Kwid have been falling leading to this drop in market share. In FY19, its sales volume dropped by 22% to just about 82,000 units even as the passenger vehicle industry managed to grow by nearly 3% as per the SIAM data.
Renault had a runaway success with its launch model the Duster, which had even displaced the Scorpio from the M&M stable as the best-selling SUV in the country shortly after its launch in 2012, and has sold over 2,00,000 units since then but today it does not come anywhere in volume sweepstake. The Kwid with its two variants are the volume grosser since the launch in October 2016 but has lost the initial steam of late. Its other models like the premium compact SUV the Capture and the MPV Lodgy have also failed to make a mark. It has also stopped selling imported models since the past few years now.
Venkatram Mamillapalle, who took over the reins of Renault as MD from March, told “As part of our mid-term plan which is 2020-22, we will be launching two all-new models--the RBC (code name for the new multi-purpose vehicle Triber) that will be launched in the September quarter, and the HBC (code for an unnamed new compact SUV) which will be rolled out in 2020. That apart, we'll have a face-lift each for the Duster and the Kwid this year itself," The mid-term plan is in force and the company has to double our market share by 2022, he underlined, and said the second leg of the revival plan is to more than double the product coverage from 24% to over 50%.
The Triber is a multi-purpose vehicle based on the Kwid platform and will be commercially launched in the second quarter. Though slightly smaller, the Triber will compete with Maruti Ertiga, the best-selling multi-seater. Renault currently sells around 7,500 units a month, of which over 5,000 are the Kwid, and around 2,000 are the Duster and Captur combined with the rest being contributed by the Lodgy, which has not took the volume test so far.
Mamillapalle admitted that the company has made some mistakes with some of its models like the Captur and the Lody, which sort of gave an impression that the carmaker was confused about its India plans. He also admitted to the problems at the dealerships, besides missing the deadlines on new launches.
It can be noted that many Renault dealerships have left or taken up dealerships for other brands while some of them even exited the business. Renault today hawks its four models across 350 dealerships-a number the market leader Maruti has added in the past financial year alone.
Like elsewhere, Renault has formed a manufacturing partnership with Japanese carmaker Nissan in the country. The joint venture runs a 4-lakh unit per annum plant in Chennai, the capacity of which is heavily under-utilized now. As per Mamillapalle the immediate target is to reach 2 lakhs in order to become profitable.
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