French auto major Renault today unveiled its global entry-level car Kwid to be priced up to Rs 4 lakh in the country.
The car will hit the Indian market around the festive season this year.
Developed with an investment of around Rs 2,000 crore, the SUV-shaped small car will be powered by an 800cc petrol engine. The company is looking to make India a regional hub for exporting the new car.
"The Kwid will be a game changer and it will be at the entry-level segment that accounts for 25 per cent of the Indian car market today," Renault Group Chairman and CEO Carlos Ghosn said here after unveiling the car.
He said Renault has set a target of cornering 5 per cent market share in India and the new car will play a big role in it.
"Renault Kwid will be a big contributor to our India growth story first, secondly in other emerging markets and then globally," Ghosn said.
While Maruti Alto800 is priced between Rs 2.83 lakh and Rs 3.4 lakh, Hyundai Eon is priced between Rs 3.09 lakh and Rs 4.22 lakh (ex-showroom Delhi).
Exuding confidence of Kwid doing well in India, Ghosn said, at present, the products available at the entry-level segment offer either affordability or attractiveness or innovativeness, but the Kwid will offer all of three attributes.
Developed on Renault-Nissan alliance's global CMF-A platform, Ghosn said, it was a combined effort from engineers in France, Japan and India.
The car will have 98 per cent localisation, he said, adding that it could be exported to neighbouring countries only as shipping it to other emerging markets like Latin America will not be cost-effective.
"So we can make India a regional hub of exporting the car to neighbouring countries and to some markets in South East Asian countries," he said.
Car sales in India in financial year 2015 stood at 18,76,017 units compared with 17,86,826 units in the previous fiscal, up 4.99 per cent, according to the Society of Indian Automobile Manufacturers (SIAM).
Previously, Renault's presence in the hatchback segment was limited to Pulse with a starting price of Rs 5.03 lakh (ex-showroom Delhi). The company sells six models in India, including the popular SUV Duster and newly-launched MPV Lodgy.
In FY14-15 Renault sold 4,006 units of cars as against 10,367 units in FY13-14, while in utility vehicles, it clocked 39,378 units as against 47,001 units in FY13-14.
Alliance partner Nissan on the other hand had sold 26,589 units in FY14-15 as against 22,603 units in the previous fiscal. Its utility vehicle sales were at 20,885 units compared with 15,421 units in FY13-14.
At Davos last year, Carlos Ghosn had said Renault-Nissan alliance was looking to have 10 per cent market share. In the past, the alliance had tried to form a partnership with Bajaj Auto for a low cost car but it didn't materialise.
Renault-Nissan Alliance has a plant in Chennai, where they have invested Rs 4,500 crore with an initial annual production capacity of 4 lakh, which can be scaled up to 4.8 lakh.
The plant exports to over 100 countries, making Nissan the third biggest exporter of cars from India. The alliance employs more than 15,000 people in India.
Renault targets aspirational buyers in India with new premium compact car
(Reuters) Renault launched a premium compact car in India on Wednesday to challenge rivals such as local leader Maruti Suzuki, becoming the first European automaker to debut an international model in the world's sixth-largest car market.
The Kwid hatchback will go on sale at the end of the year at a starting price of 300,000 rupees ($4,700), and will be made almost wholly in India, Renault said.
Car makers in India, though still struggling with a sluggish rural economy, are increasingly looking to premium compact cars with high-end features to target aspirational consumers who want more than just a cheap ride.
Renault's SUV-like Kwid - aimed at India, the south Asian region and some other emerging markets - comes with an airbag option and navigation functions, neither of which are common in the country's best-selling small cars.
To better compete with rivals like Maruti and Hyundai Motor Co the French company is also extending its dealer network in India, and could almost double its spread to 280 sales outlets by the end of 2016 from the current 157, group chief executive Carlos Ghosn said.
"We know very well that India is one of markets with the highest growth potential," Ghosn said in the southern Indian city of Chennai, India's car manufacturing capital.
"We expect this car to be a game changer for Renault India."
He said both Renault and Nissan Motor, its partner, targeted a 5 percent share of the Indian market, to reach a joint 10 percent, without giving a time frame. Renault's share currently stands at 1.5 percent.
"India is not an easy market. We are learning our way," Ghosn said.
Sales of compact cars are expected to rise to 25 percent of overall light vehicles sales in 2019 from 17 percent in 2010, according to IHS Automotive.
($1 = 63.8250 Indian rupees)