French auto major Renault expects the signing of the historic India–EU Free Trade Agreement (FTA) to drive a sharp rise in export volumes of left-hand-drive cars and auto components to European markets, while strengthening its plans to position India as a global export hub.
“We have some plans to use India as an export hub. This (India-EU FTA) will help us succeed in this target,” Stephane Deblaise, CEO, Renault Group India, told “We don’t know all the details of the trade deal but it’s good to have agreements between the continents in this fragmented world.”
Renault may also look at scale up engine exports to Europe once the fine print of the trade deal is out. “We have a good supplier base and a good powertrain plant. We will for sure export more of our best solutions to Europe,” Deblaise said.
Renault India on Monday unveiled the next-generation Duster, marking the return of the model that played a key role in the early growth of India’s compact SUV segment. The company will look at export opportunities for the new Duster, starting with South Africa and other markets.
Component Industry Growth
Venkatram Mamillapalle, Managing Director, Renault India, said the benefits of the FTA would accrue more to suppliers than original equipment manufacturers.
“Auto component exports will exponentially increase because we have technology, cost competitiveness, and quality standards,” he said, adding that tariff reductions would lead to greater export diversion towards India.
“Today, most of us are doing right-hand drives. We will have the ability to export left-hand drives into the competitive market, which is Europe,” Mamillapalle said. He added that being an European brand, Renault Group can exploit India with this FTA opportunity. “I can start making those Renault cars which are made in Europe in India at a competitive price.”
Mamillapalle said the trade pact would also spur demand for auto parts from India, which already hosts several European component makers such as Bosch, Valeo and Visteon.
“We have an engine company Horse Powertrain doing E-Tech Hybrid technology for Renault worldwide. They will be coming into India very quickly. When they do, they are not only going to service Renault but other customers also because the technology is unique,” he said.
He further noted that FTAs go beyond trade volumes and also facilitate technology flows. “The European companies will freely put the technology into the country which makes it cost competitive and has the potential to give back. This is a trade balance,” he said.
Potential Import Opportunities
On reports of a proposed duty cut of 30–35% on car imports priced above €15,000, Mamillapalle said Renault would consider importing low-volume, high-end vehicles if the opportunity arises, though the immediate focus remains on boosting exports.
The new Renault Duster will be assembled at the company’s Chennai facility, one of Renault’s five industrial hubs outside Europe, with an annual capacity of 480,000 units. Since 2010, the plant has produced over 2.8 million vehicles and 4.6 million engines and gearboxes.
“I am using 48% capacity today and the balance is empty. With the launch of Duster, we should be reaching around 70% capacity utilisation by next year,” Mamillapalle said. The Chennai plant also assembles Renault’s Triber and Kiger models, as well as vehicles for Nissan Motor India.