Renault – The World’s leading French Automotive brand
Renault India registered monthly sales of 12,143 units in September 2016 as against 1,781 units in the corresponding month last year. The YTD sales figure stands at 86,835 units against 26,559 in the corresponding period last year.
Offering a SUV-inspired stance with a high driving position, attractive exterior design and welcoming interior, modular layout and generous storage, diamond grille that gives all Renault models an immediately recognizable family resemblance – the Kwid is proving to be a feather in the Renault – Nissan Alliance in India (Interesting to note that Renault in Mexico is directed by a Mexican who used to work at Nissan, while the director of Nissan in India is a French person from Renault).
Nissan and Renault share engineering and purchasing center, as well produce cars on the shared plant in Chennai. The plant can build four different platforms and eight body styles on the same assembly line. Renault India cars are manufactured in the manufacturing facility located in Oragadam, Chennai, with a capacity of 480,000 units per annum.
Their Alliance also results in Renault supplying Nissan with diesel engines and manual gearboxes, while Nissan supplies Renault with gasoline engines and automatic gearboxes. Today, 80% of power trains are co-developed or shared by Renault and Nissan. Renault expects the global market to record a growth of 1% to 2% in 2016 over 2015 and is targeting India growth at 8%.
The Renault Nissan Alliance was also helpful with the Kwid’s body and chassis being tested in Japan, body equipment evaluated in Korea and endurance tests carried out in France, while India became the backdrop for overall and assembly testing. (Kwid has been developed at a cost of Rs. 3,000 crore)
The success of Kwid is highly promising and the company plans to develop a number of other vehicles based on the same platform. To date Renault has launched six vehicles (Fluence, Koleos, Pulse, Duster, Scala and Lodgy), with Kwid – the brand’s seventh vehicle which has already bagged 25 awards, which include 9 Car of the Year Awards.
One of the few reasons Kwid clicked with the Indian consumers was its SUV-inspired body, the absence of fresh models though Maruti (this can be confirmed by the fact that Maruti recently launched the renewed version of Alto800 and Alto K10 in association with M.S.Dhonic over the release of his biopic) and Tata Motors dominated the entry level segment which accounts for 25% of the Industry volumes and the presence of its dealers across India with focus on Tier 2 to Tier 5 cities.
Just three months after launch in September 2015, Kwid (manufactured with over 98% localization including 60% in the Chennai region) had already won over 80,000 customers through the digital campaign for its launch through which customers were able to reserve their vehicle on line using a mobile app (Renault claims that 2,30,000 users downloaded the app immediately after its launch).
Since its launch (24-Sep), Kwid has received over 165,000 orders (25,000 orders as of 6-Oct, Touched 50,000 order on 30-Oct) and the company has been able to deliver only 88,391 units as of Aug-16.
The company has now decided to go all out chewing into the market share of Maruti Suzuki and other manufacturers. It showcased 2 new versions of Kwid at the Delhi Auto Expo in Feb-16 with
“KWID CLIMBER – built for adventure off the beaten track” and
“KWID RACER – conjures up the world of racing”.
More recently the company has gone ahead with a number of initiatives:
- Introducing the newer versions of the Renault Kwid with engine upgrade from 0.8L to a 1.0L – i.e. 1000cc three-cylinder petrol engine that is capable of churning out 67bhp and develops a satisfying peak torque of 91Nm. The motor is a significant upgrade over the 800cc version currently available (the company had mentioned on the 4-Apr-16 that a 1L version would be launched by the festival season). It is priced just Rs.22,000/- more than the 0.8L version.
- Expanding its network to Nepal – i.e. Renault marked its entry into the Nepal market by associating with one of the largest business groups – Vishal Group. Advanced Automobiles Pvt Ltd, a part of the Vishal Group, will sell Kwid and Duster in Nepal, where SUVs and hatchbacks are the growing segments (there are only a limited number of countries where the company can export its right hand driven car with the same or lower emission standards). Other destinations of its exports include East Africa, France, Germany, Iran, Japan, Kenya, Mauritius, Mozambique, France, Sri Lanka and Tanzania among others.
The company’s Nepal distributor has launched “Renault Cashtival” which offfers cashback of up to Rs 125,000 and Rs 90,000 on purchase of Renault Duster and KWID, respectively. The offer has been launched on the occasion of Dashain and Tihar festivals and it will be valid until the 6-Nov.
- Increased Dealer Base in India – the company has 234 dealers across India. The dealer network currently is spread to regions unlike where other automobile manufacturers would have like Azamgarh, Belgavi, Dhanbad, Gangtok, Jabalpur, Port Blair, Tirupati and others. Renault aims to increase its reach to 270 outlets by the end of 2016. (In June the company delivered the 5000th KWID in Kerala where it has 11 dealers). Maharashtra, Uttar Pradesh and Gujarat have over 20 dealers each while the remaining 28 states have a total of 165 dealers.
- Increased Brand Presence – joining the other big ad spenders like Maruti and Hyundai, Renault launched the ad war roping in Ranbir Kapoor (July-15) – targeting the young generation. Renault also replaced Hero MotoCorp as the official Title Sponsor of the “MTV Roadies” (Oct-15) which showcased its latest version of the Duster (a show that was sponsored by Hero for the past 12 years). Renault has increased its presence across social media and the television media since the print media has overflown with e-commerce battles.
- Development of supporting businesses – Renault’s foray into pre-owned car market with Renault Selection – this will boost the business of its Nissan Renault Financial Services (penetration rate increased from 6.7% to 11.7% just a year into the business) set up to provide sales financing for customers and dealers in India. The company also has Renault Assured which enables cashless accident repairs at all Renault Dealer workshops and Renault Secure – which covers Road Side Assistance and Extended Warranty.
- Smart Pricing – We analysed the Renault dealer network across India along with the pricing of Kwid to arrive at the following observations (for KWID STD 0.8 variant):
- The most affordable/ lowest priced Kwid is available at Rs. 2.65 lakhs in the markets of Delhi followed by Faridabad, Gurgaon in Haryana and Ghaziabad, Hapur, Meerut and Noida in Uttar Pradesh. Is Renault hoping volumes will compensate for lower margins? Maruti Suzuki’s products would be priced lowest in these regions due to the proximity of its factories in Gurgaon and Manesar while for Renault which has production facilities only in Chennai and Pune, this is a significant loss in ASP. Renault has made a conscious choice of targeting these markets which is clearly evident from the fact that markets of Haryana, Punjab and Chandigarh are the next in line with the second lowest pricing averaged at Rs. 2.70 lakhs.
- The most expensive/ unaffordable priced Kwid is available at Rs. 2.99 lakhs in Mizoram which does not have a single dealer network. This is followed by the markets of Assam, Arunachal Pradesh, Meghalaya, and Manipur. Each of these cities have 1 dealer network barring Assam which has 3 currently with a pricing averaged at Rs. 2.97 lakhs. In fact if you take the price of the next variant in Delhi which is Rs. 3.01 lakhs, the difference between the lowest variant in Mizoram and the next variant in Delhi is Rs. 2,492/- only.
3. Not just the highest and cheapest priced, but Kwid prices vary significantly:
Lowest means the lowest variant i.e. KWID STD 0.8 and the highest variant KWID RXT 1.0 (O).
Renault hopes to sell a one million Kwids worldwide every year. It is also targeting a market share of 5% by 2017 and looking to export them to other foreign markets. The launch of its newer updated version with the 1L engine during festival season has been timed right.
Not everything maybe rosy either. Results for India’s ‘car of the year’, the Renault Kwid, surprised and disappointed Global NCAP. Following Renault’s latest set of improvements, the Kwid was assessed again in the frontal impact test and the model still offers just one star for adult occupant protection.
The latest version and the most highly equipped safety levels, includes an airbag only for the driver and a seatbelt pretensioner for the driver’s seat. During the test this version still showed high chest deflection, explaining the one star rating in the driver seat.
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