 "Driving into the crowd")
Renault joined Tata Motors in shaking up India's entry-level car segment, by launching its compact hatchback, the Kwid, on Wednesday. Tata Motors had launched the AMT version of the Nano (Gen X) only a day before.
The Kwid is expected to be priced around Rs 3-4 lakh and will be ready for sale in the festive season.
The Kwid was unveiled in Chennai by the chairman and CEO of Renault Group, Carlos Ghosn, who also doubles up as the CEO of the Renault-Nissan Alliance. India is the first market of the Kwid's launch, in accordance with the company strategy of positioning the car as a vehicle of choice for emerging markets. Ghosn says, "Kwid will be a game changer in Indian and global automotive markets. This is a car for conquest," referring to the bets Renault has placed on it to expand its market share. Renault also launched Lodgy, a few weeks back, to go up against the Maruti Suzuki bestseller, Ertiga.
Renault is looking to be present in every segment of the car market with the present line-up. Ghosn says, "With the existing four products (Fluence, Pulse, Scala, Duster), the company was catering to 50 per cent of the (car) market, and now the Lodgy and Kwid will increase it to 75-80 per cent". The French auto major currently has less than 2 per cent market share and is aspiring to reach 5 per cent in the next one or two years.
According to Ghosn, the Kwid fits in with Renault's international growth strategy of providing accessible mobility for all.
The company has, in keeping with the customer profile of emerging markets, kept its price competitive. This has been possible given the high level of localisation that has been achieved - around 98 per cent with the Kwid. The new Kwid will compete with Maruti's Alto, which is also the largest selling hatchback in the world (in 2014, 264,544 units), Hyundai's Eon and others (see table). The top-end Eon (0.8 litre) costs Rs 4.11 lakh, while Alto 800 comes to around Rs 3.44 lakh, ex-showroom Delhi. The lower-end model of the Maruti warhorse, Wagon R, too, is in the same category. Interestingly, while the segment has seen a flurry of activity in recent months, the slump in the auto market has meant a dip in category sales.
However, the Kwid has a steep road to navigate. One, it is entering the entry-level category in one of the world's largest markets. Besides sheer volume (the segment accounts for 25 per cent of the car market), it is also price-sensitive. The challenge for Renault would be to overcome the buyer's predilection for sticking to known brands, such as Maruti and Hyundai, in this case. Renault is still not a mass brand in India in terms of recall, unlike its other markets.
Second, Renault is entering the segment after the Datsun debacle faced by its partner, Nissan.
The Kwid is Renault's first car based on the CMF-A (Common Module Family-Affordable) concept (or an overall platform), on which the Datsun was also styled. It is the guiding principle for the alliance's small cars. Nissan had been quoted saying that CMF-A, on an average, reduced 30-40 per cent of the cost of a model and 20-30 per cent of the cost of parts for the alliance, which actively share the supply chain.
However, despite being aggressively priced, the Datsun failed to create ripples in a category that is dominated by Maruti and Hyundai. In November of 2014, the Go registered sales of just 507 units, nearly a fourth of Tata Nano's 1,900 units. For 2014-15, the average monthly sale for the Go was around 1,070 units, while the Maruti Alto sold around 21,000 and Hyundai Eon 6,500.
Ghosn had come to Chennai in 2013 to launch the Datsun, resurrected after nearly three decades. The brand now has two cars, the Go and the Go+.
The alliance seems to be doing things a bit differently this time around. For example, it has laid out some elaborate distribution plans for the Kwid. Sumit Sawhney, Renault's country CEO and MD, says that the company will double its outlets by next year from the current 157.
With a high decibel launch, a deeper and wider distribution network and a competitive price, the company is expecting to break in big, in the Indian market. It is being doubly careful since one of its bestsellers, so far, the Duster, too, has seen muted sales of late. The Kwid, then, has a lot riding on its young shoulders.
The Kwid is expected to be priced around Rs 3-4 lakh and will be ready for sale in the festive season.
The Kwid was unveiled in Chennai by the chairman and CEO of Renault Group, Carlos Ghosn, who also doubles up as the CEO of the Renault-Nissan Alliance. India is the first market of the Kwid's launch, in accordance with the company strategy of positioning the car as a vehicle of choice for emerging markets. Ghosn says, "Kwid will be a game changer in Indian and global automotive markets. This is a car for conquest," referring to the bets Renault has placed on it to expand its market share. Renault also launched Lodgy, a few weeks back, to go up against the Maruti Suzuki bestseller, Ertiga.
Renault is looking to be present in every segment of the car market with the present line-up. Ghosn says, "With the existing four products (Fluence, Pulse, Scala, Duster), the company was catering to 50 per cent of the (car) market, and now the Lodgy and Kwid will increase it to 75-80 per cent". The French auto major currently has less than 2 per cent market share and is aspiring to reach 5 per cent in the next one or two years.
According to Ghosn, the Kwid fits in with Renault's international growth strategy of providing accessible mobility for all.
However, the Kwid has a steep road to navigate. One, it is entering the entry-level category in one of the world's largest markets. Besides sheer volume (the segment accounts for 25 per cent of the car market), it is also price-sensitive. The challenge for Renault would be to overcome the buyer's predilection for sticking to known brands, such as Maruti and Hyundai, in this case. Renault is still not a mass brand in India in terms of recall, unlike its other markets.
Second, Renault is entering the segment after the Datsun debacle faced by its partner, Nissan.
The Kwid is Renault's first car based on the CMF-A (Common Module Family-Affordable) concept (or an overall platform), on which the Datsun was also styled. It is the guiding principle for the alliance's small cars. Nissan had been quoted saying that CMF-A, on an average, reduced 30-40 per cent of the cost of a model and 20-30 per cent of the cost of parts for the alliance, which actively share the supply chain.
However, despite being aggressively priced, the Datsun failed to create ripples in a category that is dominated by Maruti and Hyundai. In November of 2014, the Go registered sales of just 507 units, nearly a fourth of Tata Nano's 1,900 units. For 2014-15, the average monthly sale for the Go was around 1,070 units, while the Maruti Alto sold around 21,000 and Hyundai Eon 6,500.
Ghosn had come to Chennai in 2013 to launch the Datsun, resurrected after nearly three decades. The brand now has two cars, the Go and the Go+.
The alliance seems to be doing things a bit differently this time around. For example, it has laid out some elaborate distribution plans for the Kwid. Sumit Sawhney, Renault's country CEO and MD, says that the company will double its outlets by next year from the current 157.
With a high decibel launch, a deeper and wider distribution network and a competitive price, the company is expecting to break in big, in the Indian market. It is being doubly careful since one of its bestsellers, so far, the Duster, too, has seen muted sales of late. The Kwid, then, has a lot riding on its young shoulders.