French carmaker Renault is betting on SUVs, hybrids and exports to break into India’s fiercely competitive car market. Stéphane Deblaise, Chief Executive Officer, Renault Group India, tells TNIE’s Arshad Khan why the automaker is confident of its €2-billion export target, how the new Duster could drive growth, and why India will emerge as one of Renault’s top three markets. He also signals a rethink of the small-car strategy as buyers increasingly trade up. Edited Excerpts:
You have been heading Renault India for more than a year. What do you think of the Indian market now, and do you think your plans need any tweaks?
As I have a little bit of experience now, I saw very quickly what the market in India was like, how it was working. First, your cars have to show they are big even if they're small. Because the roominess inside is very important. And as well, the design has to show power. It cannot be a low-key design. This is why the SUVs are well-fitting with this mindset. And after that, you need good features, technologies and a good powertrain. If you do all these, you should be successful and if you have a very famous brand, if you do this, you sell like hell.
Don't you think it's difficult for a car maker to crack the domestic car market given the 6 players control 90% share?
There is no easy market. I did several countries and some markets were more complicated on some criteria. For instance, here, they say, the competition is tight and six OEMs have 92% of the market share. But in my former country, Korea, only one company had 92% share. I can tell you it was not easy. And Renault was producing, selling, and engineering cars in Korea. The fact that it is difficult is very good. It challenges the Renault ecosystem, challenges engineering and product planning and challenges ourselves, to be better. If we are not in challenging markets, what happens is that one day, you discover that the competition is in your backyard, and you did not see this happening. It's very good to be on the front line of different markets and fight.
How are your exports doing given Renault Group targets 2 billion euros in annual exports from India? Are you looking at newer markets to export your vehicles?
We are ambitious. We are proud to be ambitious, and we are not scared about difficulties. This, you have to be sure. I can tell you that we are fighting like hell, and we are smart like hell, and we have the technology which is very good. Sometimes the market is unfair, the time is; you are not successful when you expect to be, and you are successful later. You should not doubt every figure we have set. You hear 2 billion euro export target and you question it. It is feasible for it will be done.
Regarding new markets, it is difficult to ensure because it’s a very live topic. Right now we are exporting to 16 countries and the upcoming cars - Bridger - will be exported to 90. But again it is a very live topic. For instance, if one country wants 5,000 cars per year, we export and if this country suddenly says they want to sell 30,000 per year, we will investigate whether to localise or not there. If it is profitable, we localise.
Are you looking for partnerships in India with a local manufacturer?
We always say the same. We are open. We are not looking for it, but we are open.
How big is India currently for you since you're aiming for it to be in the top three?
More or less this year, we will be around 50,000 cars. Right now India is not in our top 10 markets, but it is a growing market which is naturally helping us if we do the job properly. We are also doing more in India than we do in some countries.
Do you have plans to make a comeback in the small hatchback segment?
At this stage, it is not yet planned. But doesn't mean we will not do it. Following the GST rate cut one year ago, we saw that the less expensive cars, in the sub four-metre segment, did not catch the wave as quickly and as much as the cars above. The meaning of this for me is that the people, who spend the same amount of money spend it on better cars. Soon, I will investigate what we have to do in the small car segment.
It’s been six months since the launch of the new Duster. Are you satisfied with the performance so far?
Until now, we were addressing a very narrow band of customers because we had a very narrow band of powertrains. Due to this, we could not address a lot of volume. This is why we are introducing a hybrid, that too at a good price of Rs 16.99 lakh. The performance of the new Duster is by far the best in the market. It should attract customers.
Where do you see the share of strong hybrid vehicles going in India?
Market share depends on the offering as well. Right now the number of hybrid products is low. For instance, if we speak about BEV, its market share is growing sharply; there are a lot of players coming. It would be the same for hybrid, because many OEMs will come with a hybrid solution, but a less good solution than ours. Don't forget this. Its share in total sales could be very high in the long term, maybe 40%, 50% or even 60% depending on the timeline.