We are in India to learn to be frugal: Ghosn

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Nashik, Apr 4: Carlos Ghosn, president and CEO of Renault SA and Nissan on Wednesday said that European automakers are looking at India to learn from the frugal product planning, engineering and manufacturing of Indian automobile companies. Ghosn, whose visit to India coincided with the launch of the mid size sedan Logan, told reporters at Mahindra-Renault's plant here, “We have come here to try and implement principles of what we call frugal product planning and frugal engineering. You are not going to learn these by reading, you are going to learn them by practicing with somebody who is doing as a way of doing.” “Logan, is a $5000 car and very difficult to make in the high cost market in Europe. That is why India is the best market for us,” he added. About the Indian market, Ghosn said, “I think there is more potential. If we can produce more, we would be able to sell more cars. I have been told that we would be able to achieve the breakeven point by selling 30, 000 -32, 000 cars. But you can't rely on this figure because it depends on what different variants of cars are accepted by the customers. It is highly impossible to gauge the profit we will make for 2007, as we would start selling cars by May, but I am optimistic that we would be able to get profit on completion of a year from May.”

Replying to a query on whether the two alliances would create confusion and lead to cannibalisation of brands, Ghosn said, “I think the two alliances would be different and there would not be any confusion. There would no cannibalisation of brands and the alliances would be completely autonomous.”

Ghosn said that for the moment what is planned is Logan or a derivative of Logan. “There are a number of Renault products which may fit in with the Indian consumer, but again the market in India is also changing. Today it is 1.2 million cars with 80% being the small cars and 20% other categories. This 20% of the category will grow in the future with India becoming more wealthy, and with the increasing purchasing power of the people, the market of the bigger cars will grow.”

—The travel for this story was sponsored by Mahindra-Renault