Three years ago, Renault announced that it was capping further investments in its Chennai plant as a result of the global slowdown. Today, along with partner Nissan, it is scheduled to achieve the 2015 installed capacity target of four lakh units within the next six months.
Good reason to celebrate, one would think, but Mr Marc Nassif, Managing Director of Renault India, is a worried man. “We are delighted that things are on the fast track but the big concern is the infrastructure in the State,” he told Business Line .
Poor infrastructure
Terming the roads leading to the factory in Oragadam near “a real burden,” Mr Nassif says it is hell trying to get through to the plant especially after the rains. “It is hard to believe that this is the location of a full-fledged global facility. A lot has been done but when a few bottlenecks remain, it makes your life miserable operating that plant in three shifts now,” he adds.
The Ennore port, which is the company's lifeline for exports, is 80 kilometres away and the poor roads not only add to the travel time for consignments but inflate costs further.
High charges
It also has the most expensive running charges and Mr Nassif believes the costs of using Ennore port are the highest in the world. Vessel charges are much higher than other Indian and other international RoRo ports, he adds.
At the port, handling capacity remains an issue for Nissan today and this could get even more challenging for Renault in the coming months as global shipments increase. “There are already key components being developed in India for some of our worldwide vehicle projects. This basket will only get larger and good port infrastructure is an imperative,” Mr Nassif says.
‘TN will step up'
Yet, the Renault chief is confident that the dismal state of affairs will not continue. The Tamil Nadu Government, he adds, is aware of the problems and will get them sorted out soon. “We have no doubts about their commitment to put things in order. However, speedy implementation is the key at this point,” he says.
This is because an aggressive product development plan is underway which will see five new models from the Renault stable by 2013. The small car, Pulse, will be followed by the Duster SUV and another offering tipped to be a sedan.
“We are perfectly in sync with the realities of the Indian market and the Logan days are behind us now. The momentum is in place and we only hope the Tamil Nadu Government can keep pace and set right the infrastructure constraints,” Mr Nassif says.
The events over the last few months also show that States like Gujarat have announced their intent to emerge auto hubs during the course of this decade. The likes of Tata Motors, Peugeot and Ford have already made Gujarat their home.
Renault has so far no such plans, reiterates Mr Nassif.
“We deliberately chose Tamil Nadu because of what it had to offer in terms of skills, from technicians to engineers, and a good vendor base. Once the other irritants are overcome, we are here to stay but the key is to deliver now. Plans for the future are always open but our parent company expects us to show results right away,” he says.