French carmaker Renault's Kwid, a SUV-styled small car, seems to have run out of gas after a spectacular start three years ago. Kwid’s monthly sales have declined 30% during January-July 2018 compared to the year-ago period.
French carmaker Renault’s Kwid, a SUV-styled small car, seems to have run out of gas after a spectacular start three years ago. Kwid’s monthly sales have declined 30% during January-July 2018 compared to the year-ago period. Its average sales have declined from 7,700 units every month in 2017 to 5,500 units in the calendar year. The Kwid, which competes with the likes of Maruti Suzuki’s Alto, Hyundai’s Eon and Nissan rediGo, is sold in eight variants in the price range of `2.67-4.60 lakh.
Launched in September 2015, the Kwid enjoyed runaway success as it broke the monotony of a small hatchback in a segment dominated by Maruti Suzuki’s Alto. The next year witnessed the affordable hatchback or the A-Segment car garner sales of over 1.05 lakh units, during which it launched an automatic (AMT) variant and a larger displacement engine attracting young women buyers and urban customers. Many believed that Renault, the maker of Duster SUV, offered a car which felt more premium to buyers in the highly price-sensitive segment.
But the party did not last long for the automaker. After an unprecedented growth in calendar 2016, the sales slumped around 12% to 92,000 units in calendar 2017. The dip in sales is sharper this calendar year during the January-July period in 2018, with Kwid sales contracting 30% y-o-y to 38,459 units.
Sector analysts believe that the vehicle fell short of buyer expectations resulting in declining sales. “There was a novelty factor to the car. The Kwid took everyone by surprise and there is no comparison to its looks. But somehow it lost its way in terms of service expectations and long-term ownership to customers. Majority of the sales in this segment comes from rural areas where Renault has no presence,” Gaurav Vangaal, senior analyst, IHS Markit, said.
Domestic sales of Alto, on the other hand, remained flat at 1.47 lakh units in the first seven months of the ongoing year. Hyundai Motor’s small car Eon slipped 8% to 32,450 units during January-July 2018 due to no major changes in the car.
“Small cars continue to be popular amongst buyers in tier II-III cities and first car owners. The sale numbers jump whenever a new car is launched in this segment as it happened with the Kwid. But consistent growth requires great vehicle performance and great sales-service network. Unfortunately, the Kwid missed out on all these fronts,” an analyst with a foreign brokerage firm said.
Renault has sold more than 2.5 lakh units of Kwid in the domestic market. The carmaker launched a facelift version earlier this month with hopes of stemming declining sales during the upcoming festival season. However, many believe the road seems all uphill for Renault.