The ongoing liquidity crunch and slowdown in demand has forced Renault India to hold on its plans for introducing Renault cars in the country. This invariably means that cars from the Renault stable will, in all probability, not be seen on Indian roads before 2011 at the earliest as against earlier plans of launching them in mid-2010.
?The company?s plan for manufacturing Renault cars in India, beginning mid-2010, has been withheld for a while because of the slowdown in demand,? said Ashish Sinharoy, VP, corporate affairs, Renault India, adding that once the liquidity improves and there is sufficient cash flow in the system, the company would immediately de-freeze the Renault assembly line at their upcoming plant in Chennai as Renault India continues to be bullish about the Indian market.
According to him, the low penetration level in India means that there is tremendous potential for growth in India and hence it is an important market for all global car manufacturers. ?The pent up demand will continue for a fairly long time and the manufacturing capabilities in India are at par with those in other developed countries,? he said, adding that India will eventually develop as an export hub for Renault.
The company, however, is going ahead with the construction of its plant that is coming up in Chennai in a 50:50 joint venture with Nissan Motor of Japan.?The plant, which is being set up at an investment of Rs 4,500 crore and has an installed capacity of 4,00,000 units over the next seven years, will be ready by the end of 2009 with assembly line of Nissan going operational by the mid of next year.
Consequently, while Micra from Nissan will debut in 2010, Renault cars will follow later. ?While Renault India has so far announced introduction of four different platforms, across all segments and priced between Rs 3.5 lakh to Rs 12 lakh, in the Indian market once the market sentiments improve, the company will kick start massive study on products for the domestic market from next month,? concluded Sinharoy.
Car sales in India started slowing down from September last year because of high interest rates and low consumer sentiments.