 "Sumit Sawhney")
After achieving three-fold year-on-year growth in sales in April this year, and a 4.4 per cent market share in the Indian market between January and April, Renault is optimistic on a five per cent market share in India by 2016, much sooner than its earlier target of 2017-end. India chief executive officer and managing director Sumit Sawhney talks to Sohini Das on plans. Edited excerpts:
Your sales so far this year have been promising. What are your targets for market share in the Indian passenger vehicle industry?
The sales growth has been extremely encouraging. We are the fastest-growing brand in India and already rank five in the Indian market. We are just a four-year-old brand here in India, however, we are the No 1 European brand in the country. We had originally planned to garner a five per cent market share in the Indian industry by the end of 2017, however, our January to April figures show that we already have a 4.4 per cent market share in the country. In fact, if we consider April alone, the market share was around 5.2 per cent. Therefore, in the coming months, we expect to hold on to this five per cent market share, and, hence, we have revised our target market share. We aim to achieve a five per cent market share in India by the end of 2016. We follow a calendar year.
How are you planning network expansion to keep up the sales momentum?
We obviously have aggressive network expansion plans in place. In 2014, we had around 157 outlets, which increased to 205 by December 2015. And this year the target is to have 270 outlets by the end of 2017. More than 50 per cent of the upcoming outlets would be in upcountry locations. Our Kwid has seen some great response from smaller towns and cities apart from the big metros. We are also planning to introduce 'workshops on wheels' for those areas where we do not yet have physical presence. Customers can access these mobile workshops for any servicing help with their Renault cars. This would be the first time in India.
When shall we see the new variants of Kwid? When do you plan to start exporting the Kwid?
We have plans to bring in a 1,000cc engine capacity variant of the Kwid, along with an automated manual transmission (AMT) variant. At least one of these variants should be available within the first half of the year. We will start exports of the Kwid to Saarc (South Asian Association for Regional Cooperation) countries this year, which will be followed by Brazil. We are also exploring some African markets.
Given the uncertainties around diesel cars, and new emission norms to be implemented by the Centre, what would be your product strategy in the long term?
The government is looking forward to having Euro VI cars by 2020. We should always keep in mind that it took almost 10 to 11 years in Europe to move from Euro IV to Euro VI, and we are trying to achieve that in four years. So, it’s a challenge. It was easier when we rolled out Euro IV in 13 cities. In that case, even if you took out your Euro IV car outside these cities and refilled it with Euro III fuel, it would still run. However, that is not possible in case of Euro VI. An Euro VI car won't run on Euro IV fuel. Therefore, Euro VI fuel has to be made available all across. As manufacturers, we have already expressed our feedback to the government. As a company, we are future-ready; we have the Euro VI technology.
From the government point, they have to make the fuel available, which they have said that they would. The environment challenges are well taken care of then, as we are straight away moving to Euro VI. As such an Euro IV car emits one-fourth of the emission compared to a non- Euro IV car. We require an overall 360 degree understanding of the situation and holistic and longterm planning.
What is the share of diesel versus petrol vehicles in your portfolio and how do you see that changing with the new Duster?
Share of petrol is high in our portfolio, around 75 per cent, thanks to the petrol Kwid. We do not see this ratio changing significantly in recent times. As such when the difference between petrol and diesel had steeped to around Rs 26, the demand for diesel smaller cars had swelled. However, the difference a customer pays for a diesel car is around Rs 80,000 or so. When this difference in fuel prices comes down to around Rs 10, as is now, then it does not make economic sense for the buyer of a small car to invest that extra amount. However, for those buying cars priced above Rs 8-10 lakh, paying this premium makes sense as they get better torque and better fuel efficiency. Going forward, I feel the demand for diesel cars would primarily be in the Rs 8-10 lakh bracket.
