As Chairman of Renault’s Asia-Pacific region, Gilles Normand is banking on India to take the growth story forward.
This part of the world accounts for nearly 50 per cent of global automobile sales but, from Renault’s point of view, still a relatively small part of its total numbers. As Normand wryly observes, there is a “significant mismatch” which countries like India can set right.
“The development of our business in India paves the way for us to expand in some countries where we do not have a significant presence,” he says. Renault believes Indonesia, in particular, offers tremendous potential in this business model. To that extent, India could be the starting point for a larger strategy in the Asia-Pacific region.
Though there is no timeframe in place yet for this plan, it is very likely that the trigger will be the affordable car platform being prepared jointly with Nissan in Chennai. “We think if it works in India, it can work even better elsewhere,” says Normand of this global project.
India’s own production of cars is tipped to be nearly four million units annually by 2016 by which time the Renault-Nissan alliance hopes to garner over ten per cent of the market. As Normand puts it, even a five per cent share for Renault translates into 200,000 units, which reflects the potential the country offers.
Now compare this to Korea which is a strong export hub for Renault Samsung Motors and catering to over 100 countries. “We want to have a share in the Korean market but competition has been very aggressive. Korea is important but it is no longer a growth market which means our potential is limited,” says Normand.
Hence, if Renault wants to expand in the Asia-Pacific region, it has more room to do so in India, China and Indonesia than Korea where striving for a ten per cent share “will require a lot of energy”.
The other important growth driver will be China where Renault hopes to kick off operations shortly in an alliance with Dongfeng.
For the first half-year ended June this year, Russia ended up being the automaker’s second largest market followed by Brazil. Today, regions beyond Europe account for 49.6 per cent of Renault’s global business and could take the lead over the next 2-3 years. India is now ranked 11 and Normand is confident that it will be in the top five eventually.