It’s been 10 years without profits; time we changed that: Renault India MD

Renault Kiger.

Renault Kiger.

With six model pullouts in ten years, a passenger car market share of 3.4 percent and a portfolio of just four models, most market watchers may be inclined to dismiss Renault as a not-so-serious player.

As the French auto major prepares to complete ten years in India in May, the company’s top management is looking to change gears.

“Its 10 years and we haven’t made profits. It is time we made profits. We are very close to it and we will do it,” Venkatram Mamillapalle, CEO and Managing Director, Renault India Operations, told Moneycontrol.

To make that change, Renault will have to toe the line of the revised strategy planned by its headquarters in France and steered by Luca de Meo, the new CEO of Renault, who came on board in the middle of last year.

Under its five-year ‘Renaulution’ programme, Renault will scale up its brand image, and shift focus to larger, more premium (C and D Segment) and fully electric cars that will bring in better margins. The French carmaker hopes to make all local units profitable by 2023 with India also being part of this plan.

But with products like the Kwid, Triber and now the Kiger –- all of which are priced below Rs 5 lakh — Renault is not associated with premium positioning in India. The French brand is instead known as a value-for-money brand. The company has only one product in the targeted C segment: the Duster.

“Bringing C and D Segment cars to India overnight is not possible. There is product planning in the works on this. Becoming a premium brand means moving up the value chain,” Mamillapalle added.

The Fluence and Captur -– part of the C and D segments — were attempts by Renault to grab a slice of the premium pie. However, both models enjoyed very little success and had to be phased out prematurely. Mamillapalle declined to provide details of Renault’s product pipeline for India.

Does the change in strategy mean no small cars from Renault? “No,” says Mamillapalle, who launched the Kiger, a compact SUV that rivals the Hyundai Venue and Maruti Suzuki Vitara Brezza, and is built on the Kwid platform.

“Kwid is adaptable for a country where they have roads like India. We will never take Kwid out of India. We will continue with the Kwid and Kwid-size cars,” Mamillapalle explained.

Although it entered India via a joint venture with Mahindra & Mahindra that saw the launch of the co-branded Logan sedan in 2007, Renault took a step back and ended the JV after a sustained underperformance of the only model.

Its re-entered in 2011 with the launch of the Fluence, followed by the Koleos, in the same year. Success, however, came with its third product, the Duster, in the following year when it beat Mahindra’s Scorpio to emerge as the best-selling SUV in India.

Buoyed by the response, the company stepped on the gas to launch the Pulse and Scala in 2012 only to withdraw them within six years following a below-par market response. Renault tasted success again in 2015 when it launched the Kwid.

“I am sure to sell at least 5,000 units of the Kiger every month and I am also sure of making money at these prices,” said Mamillapalle, eyeing profitability.