French auto manufacturer, Renault, which operated in the Indian auto market through its partnership with Mahindra & Mahindra, now plans to re-enter the market on its own, after splitting from JV partner M&M in 2010. They now plan on selling around 1,00,000 models per annum till 2013 end.
Renault already announced that they would be introducing their new Fluence model in India on May 23. The General Manager of Boulogne Billancourt, said that The company plans to sell around five models by 2012 end, and expects to have around 100 dealers pan India. They are trying to make more of their brands visible in this market. They plan to have a growth from zero to 1,00,000 by 2013 end.
Renault aims to have at least 5% of the market share in India by 2020, as their expert their vehicle sales in the market to triple to around 6mn per annum. The Fluence’s main competitors are the Corolla model from Toyota and the Jetta from VW.
Toyota managed to sell around 10,707 Corolla models in India in the last fiscal year, according to information from SIAM. Nassif, however, refused to give details about the price of the model before its launch.
Meanwhile, Darius Lam, automobile analyst with Bangkok based, J.D. Power & Associates, said that they think Renault’s projection of selling a 100,000 models by 2013 end is optimistic. Renault will need to pay attention to building their brand image in the Indian auto market, where it not known as widely.
They should also introduce more competitively priced models with economical costs of running and increase their network of dealerships in India. The growth of car sales in India could slow down to 18%, because of higher prices and increased costs of borrowing according to the auto industry president, Pawan Goenka.
The auto industry witnessed car sales rise by 30% in nine years, reaching 1.98mn in the last fiscal year. Last year, the venture company, Mahindra Renault, was the sole company to witness decline in sales, among 16 other car manufacturers. Since then sales have almost doubled. In the fiscal year ended March 2009, the JV lost 4.9bn.
Renault’s Koleos and Fluence models are to be initially assembled from kits. Later on their engines will be built with more domestic parts in India. The following three models from Renault will be mostly localized productions. Nassif said that they know if they need to succeed in the Indian auto market, then they will have to build and source from the local market itself.
The company is also planning on tripling their Indian sourcing of global components to around 100mn Euros or $143mn in 2011, after the received parts worth 30mn Euros last year from India. They will also be offering finance facilities to their Indian customers, however, Nassif refused to give details about which banks they would be collaborating with.