We see huge potential in rural areas

Industry hopes on BS-IV pre-buying belied: Renault India MD

In the last eight years, Renault India, which says it has become the number one European brand in the country, says it sees high potential in rural markets. Last year, Renault India grew 7.9% even as the industry saw a slowdown. This year, the situation may change due to COVID-19, says Venkatram Mamillapalle, country CEO and MD, Renault India Operations in an interview:

How was the year 2019 for you in the backdrop of an economic slowdown?

Despite the challenging macro-economic environment, Renault was the only brand to grow in 2019 and in fourth quarter of 2019, we moved to the fifth spot of the automotive pie. With the launch of Triber [an SUV] in 2019, Renault forayed into the largest and the fastest-growing segment of the Indian auto market. In 2019, Renault India sales rose 7.9% in a market that contracted 12.3%. This growth can be attributed to our product strategy, new launches, localisation and focus on quality.

What is your product line up for 2020?

With Triber, we successfully launched a spacious, flexible and affordable alternative in the market and sold more than 33,000 units since launch. We will create a new segment again with the new products that we will launch this year. We will soon launch the Triber AMT that was recently unveiled at the Auto Expo. AMT technology is becoming increasingly popular in India and we see good potential for Triber AMT. We have action planned for H2 of 2020 and details will be shared closer to the launch date.

What about your sales network?

With a developing product portfolio, we have grown the Renault family to more than six lakh customers and we aim to keep increasing that number. We already have expanded our network reach to more than 370 sales and 450 service touchpoints. Our investments in new products that will be launched in 2020 and beyond, will create new segments and will continue to contribute to Renault’s growth in India. We are working towards doubling our sales volume in India in the mid-term.

However, in the backdrop of COVID-19 and the widespread impact globally, we must look at business through a humane lens.We at Renault India completely support the government’s initiatives to help limit its spread in India. The need of the hour is to come together, ensure the safety of our family and communities and recover from this pandemic as soon as possible. We can then assess the way forward, in terms of business objectives.

Which new markets will you be entering this year?

In addition to our domestic focus, we are also exporting to South Africa and the SAARC region.

We exported more than 13,500 cars in 2019, that include Kwid and Triber. We started exports of the new Kwid to South Africa in the fourth quarter of last year. Currently, our exports stand at about 15% of total sales volume. India is a key market for Renault, and we have always focussed on being disruptive and innovative. In just eight years of our India operations, we have become the number one European brand in India. We see tremendous potential in the rural markets for our growth.

Your exports grew 10% in 2019. Do you foresee similar growth given the current scenario?

Renault India, being a priority market for Groupe Renault, has formulated a strong India-centric product strategy.

While we are strengthening our presence in India, we are starting to work closely with the government, suppliers and other partners, as we look to play a key role in the transformation of the Indian automotive sector into a global export hub.

However, considering the prevailing challenging times, the global business outlook might have adverse ramifications.

On BS-IV inventories…

We have already launched the BS VI-compliant models of Triber, Kwid and Duster. Our BS-IV inventory was liquidated last month from the plant. We had started dispatches of BS-VI cars in January 2020 itself. As on date, many of our dealers have almost nil stocks of BS-IV versions.

For the industry, initially, there was expectation of increased pre-buying of BS-IV variants. However, overall retail sales were much below expectation and the expected pre-buying for BS-IV stocks was not as forecast.

Given the magnitude of COVID-19 globally, and its impact in India over the last few weeks, the industry will have to see how the situation pans out.

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