Renault still eyeing affordable car strategy in India, even after Datsun failure image

The French automaker hopes it will succeed where its alliance partner Nissan stumbled – introduce a successful and very affordable new hatchback in India to rival the dominant player on the market – Maruti Suzuki.

The Indian-Japanese automaker has held for years a dominant market position in India, a market that is en route to maturity and is recovering from a sales crisis, with Maruti Suzuki’s Alto model being the country’s top-selling car. Renault officially introduced on Wednesday the Kwid compact model, starting at 300,000 rupees ($4,700) with Carlos Ghosn, Renault’s chairman and chief executive officer lending weight to the launch as he was present in Chennai. He forecasted the model would have a major impact on the brand’s potential growth in India starting this September, when it reaches dealer lots. On the other hand, Nissan, also ruled by Ghosn, made similar forecasts when it reintroduced the Datusn brand to the world as an affordable marquee, much alike Renault’s European Dacia brand. The first model unveiled in India, the Go, introduced last year has had to contend with lackluster sales – only around 16,000 units, shows data from the Society of Indian Automobile Manufacturers.

Such figures were lower than what the Maruti Suzuki Alto reached in a normal month, but Renault is having another go at the affordable level in a bid to lift its market share from 1.7 percent in the fiscal year that ended March to 5 percent by 2017. But Renault’s presence in rural India, where such entry-level cars are mostly sought, is minimal compared to Maruti – the French have 157 dealers all over the country and will up the tally by 48 this year, while the Indian-Japanese company has 1,500 units and 30 percent of sales are done in the rural zones.

Via Bloomberg