The Indian new car market is far from negligible, accounting for 2.6 million registrations annually. Suzuki, with its Maruti subsidiary, offers cars starting below 250,000 rupees (US$5,600) and practically rules the market with 1 million sales per year.
Renault-Nissan CEO Carlos Ghosn is determined to get a bigger slice of the pie than the measly 3 percent the two brands command with their models that are made at the local Chennai plant.
That’s why he has tapped Gerard Detourbet, the man behind the low-cost Dacia Logan, and given him an even more challenging assignment: to create a cheaper vehicle program for India that will allow the alliance to compete at a much higher level.
The 66-year old moved to Chennai earlier this year and has been building a network of local suppliers as well as a new team of executives, some of them coming from the competitors.
“We don’t set out to poach people but it happens that hey sometimes come to us from Suzuki and Hyundai”, said Detourbet. “We’ve put together a new team, so of course there are people from all over.”
The new “sub-entry” architecture Detourbet and his team are working on, and which could debut as early as 2014, aims to offer roomier cars for a similar price, that is close to US$5,500, to that of Suzuki Maruti and Hyundai, the two biggest players in India right now.
So why not just sell the Logan and get over with it? Simply because Renault tried to but, unlike Europe, it didn’t catch on in India. Subsequent plans for a Tata Nano rival were scrapped after falls of the latter dropped significantly.
Building this new architecture will allow Renault and Nissan to penetrate other emerging markets apart from India, like Russia and Brazil.
“India is the only country where you begin to see modern cars at this kind of price”, Detourbet said. “Once you’ve done battle with the world’s best cheap car manufacturer, you can go into another country where there isn’t a Maruti Suzuki and be relatively comfortable.”
By Andrew Tsaousis
Story References: Reuters
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