Renault India plans to bring the EV technology to India, double its volumes by 2022 and introduce new game-changing variants for early turnaround of the company. Venkatram Mamillapalle, country CEO & MD of Renault India, told Vikas Srivastava of FE that it has written to the ministry seeking clarity on the FAME-2 policy and sought budgetary approvals from the group management for the EV business in India. Excerpts:
The company sees itself as profitable in 2022, what is your basis for this expectation, especially when we have seen the company’s losses rise?
As part of our product-offensive plan, our investments in new products to be launched in 2019 and 2020 will create new segments which will set the platform for doubling our sales volume to 1,50,000 units annually in the medium term and achieve break-even as per our mid-term plan by 2022.
Our product strategy is based on current assets and key segment coverage, which include SUV expansion, game-changing products and stronger lifecycle plans. We will widen our product portfolio across various segments, with continuous enhancements to the existing range. Also, the focus will be to make dealer partners profitable, which in turn will lead to Renault’s turnaround, by increasing the volume and offerings.
Which are the variants that you are likely to continue with and what are the new additions in the pipeline?
At present, we have an industrial volume penetration of 24% that we want to double by 2022. This will require us to add new products to our portfolio and double our volumes to 1,50,000 by 2022. New product lines such as — Triber — which is an exclusive modular segment, where no other players are present will be added to the portfolio soon. This will also plug the gap between Renault’s offering between the Kwid and Duster segment. This will be followed by a HBC (name not disclosed), and two other lines after that. We will also continue with our other variants such as the Kwid, Duster and Captur going ahead.
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With market environment not so good and car sales falling, how are you confident you will double your volumes?
This is a country of 1.3 billion population with a car occupation ratio of 22 person per 1,000, which is a huge opportunity to encash. The car sales on a chart paper never follow a straight line, the sign waves are either upward or downward. The length of the sign wave may vary, but the curve is always upwards. The blip can be of three months or 2 years, but it finally moves upwards.
With the Renault Alliance being the largest seller of electric vehicles in the world, how soon can we expect Renault India to introduce one in India?
I am waiting for some clarity on the FAME-2 policy and have written to the ministry on this. I have also requested the Renault management for a budgetary approval for an EV project in India which I expect will happen in the second half of this financial year. We have multiple variants across Alliance (Renault, Nissan and Mitsubishi) which can be introduced in India depending on demand and pricing of batteries. I expect India to have at least 25% EV penetration in the next 10 years. I believe one factor that can help drive EV sales would be standardisation of batteries that can fit into any car.
As a new head of the company in India, what are some of the major challenges that need to be addressed?
I have three things to look at — first, one-team-one-ambition because in India we have multiple entities. I am trying to strongly integrate them. My ability to speak local language, Tamil, has helped me plug communication gaps and bind the team. Today, the issues of operator complaints against marketing personnel not selling enough volumes, and marketing personnel complaints about bad quality and timely delivery are being addressed. I need to give confidence to the person on the shop floor that there are enough volumes but not at the expense of quality. The second driver, for me, is the customer-centric approach, which includes the dealership network profitability. The profitability is not there as of now, but it will be there for sure.
I am giving confidence to dealers about profitability. Third is the organisational profitability, which will help employees to get bonus for overachieving the results. All these issues are being addressed on a priority basis.
What are your views on the cab aggregation business and would you want to enter the space in India?
It is a very important market for us, just like Yandex has done in Russia with Captur, we will like to put our vehicles in the ride sharing market, which will be different from Uber and Ola. These will be self-driving cars. We are looking for partnership with some of the companies in Bengaluru and will update in coming future on the venture.