When the Japanese carmaker Nissan announced in 2012 its plan to revive the iconic Datsun brand for emerging markets, the world stood up and took notice.
The intent was clear: In order to grow sustainably in the coming decades, it was critical to capture untapped entry-level buyers in emerging markets such as India, Indonesia, South Africa with an affordable car. The plan was simple: To offer a better product then competitors at an attractive price.
More than a year into the launch, the Go has hardly gone anywhere. In this emerging market bet, Nissan, however, was not alone; its alliance partner Renault started work almost the same time.
With an similar three years of development process, a product designed and developed in India, the Renault Kwid—with its SUV-inspired looks, aggressive pricing and modern package—makes for a compelling proposition.
On the face of it, the Kwid appears a better car than the Go and is likely to challenge rivals Maruti Suzuki Alto and Hyundai Eon. While both the brands had the same promise at the time of launch, why does the Kwid appear a more compelling option than the Go?
Price. It is the number 1 factor to come in the consideration set of affordable car buyers. If you are challenging behemoths such as Maruti Suzuki and Hyundai, you better get it right. Renault cracked the “underpromise and overdeliver” code with the Kwid pricing; in a way, it has also started a price war in the segment. A sticker price of R2.57 lakh, a marginal premium on the Alto 800 (R2.53 lakh) and far lesser than the Eon (R3.11 lakh), created a flutter. On the other hand, Datsun’s strategy of pricing the Go—even though it has a more powerful engine—between the Alto 800 and Wagon R led to a confused positioning.
Brand familiarity. If the market is tough, familiarity can help. Reviving an old brand can work, if it is well-known. Datsun, although well-known globally, is new for Indian millennials. Renault, too, has a budget brand Dacia in its fold, but it still played on the French flair with the Duster, which is a Dacia brand. Due to the success of the Duster and brand familiarity, people have already start calling the Kwid as a mini-Duster.
Features. Low-cost positioning went against the Go, but premium features in the Kwid seem to work well.
Dealership presence. Datsun failed to make a mark on the dealership front at the time of launch. A break-up with the sales and marketing company Hover a few months before the launch was the last thing Nissan wanted. On the other hand, in the run up to the Kwid’s launch, Renault opened many new sales outlets and is planning to aggressively increase their number by the end of the year.
Online presence. There is a dedicated app and a virtual showroom for the Kwid, something that should have been done for the Go. Renault has also promised mobile workshops across the country, but execution will be key.
Style and specifications. Learning a lesson from the Logan, Renault knew even before the project started that it has to offer a radical design. The SUV silhouette has turned out to be a key differentiator for the Kwid. The only way to succeed is to offer more than what the segment leaders offer. In many key parameters—space, power, ground clearance—the Kwid betters its competitors.
Platform. The Kwid, based on an all-new platform, has turned out to be a more modern offering compared to the Go which is based on an old platform.
Launch timing. They say it’s never a wrong time to do the right thing. But unlike the Go which came in the middle of a sluggish market and uncertain environment, the Kwid has the tailwind of reducing fuel prices, falling interest rates and a relatively better market sentiment.
Renault has ticked all the right boxes with the Kwid—kudos to the product planning and development team—but now the responsibility lies in the hands of the sales and marketing team to make the car work. The challenge is enormous, but the Kwid is a competitive offering to at least be part of the consideration set of the entry-level car buyer.
The author is senior analyst, Indian Subcontinent & Australia, LV Production Forecasts, IHS Automotive