Renault bets on India as European car markets are sinking image

Renault has lately been undertaking a massive product offensive in India, with five new models launched in the last 18 months.

The French automaker has accelerated product launches in India as it is looking for ways to compensate for falling sales in Europe. The latest example is the launch of the Scala minicar last month, which is part of Renault’s aim to increase its market share in Asia’s third-largest economy to 5 percent by 2020 from its insignificant current position.

After eight months this year, Renault had sold 10,259 vehicles in India, compared with only 673 during the same period in 2011, according to JATO Dynamics. Renault aims to further increase its annual sales in India to 100,000 by 2014.

However, reaching that target might be harder than it looks. Earlier this month the Society of Indian Automobile Manufacturers (SIAM) cut its car sales growth forecast for the year to as low as 1 percent. Back in July, SIAM forecast sales growth of about 9 percent, while in April it estimated car sales would rise 10 percent to 12 percent.

While on the short-term India’s car-sales growth appears to slowdown, the country is expected to see strong long-term gains.