Renault on retail growth drive

Renault India will step up the gas in expanding its sales and service network over the next year as part of its drive to reach five per cent market share.

Sumit Sawhney, Country CEO and Managing Director, believes that getting close to the customer with a wide service network and increasing market reach in small towns/cities is as important as expanding the product range.

By end-2015, Renault hopes to have in place a network of 205 outlets, up from the present tally of 157. According to Sawhney, such a network will be on a par with automobile brands that have a five per cent share which makes this drive the “the fastest expansion of sales and service outlets”.

Renault sold nearly 49,000 units in 2014, which translates into two per cent share. This will have to more than double over the next nine months, something Sawhney is confident can be done. For one thing, the Duster accounted for a lion’s share of sales last calendar with the Scala and Pulse contributing a lot less.

Renault now hopes to repeat the success of the Duster with the Lodgy due to be launched later this month. This will be followed by a small car in the second half of 2015. Together these two launches can more than contribute to doubling sales, says Sawhney.

The launch of the Lodgy is perfectly timed as the MPV segment has been growing steadily.

Renault took its time with the launch of the small car given that this is a highly price-sensitive segment where localisation is imperative to be able to stay in the race. This also explains why the company is pulling out all stops with its retail drive since smaller towns and cities constitute huge demand centres for cars.

Renault’s small car has also been earmarked for Brazil and South Africa though India will be the launch pad globally. The market reception here will be critical in taking things forward. The French automaker has come a long way since the time it first envisaged a mini-car in a joint venture with Bajaj Auto. The inspiration for this was clearly the Tata Nano but things did not work according to plan and the company is now gearing up for a more realistic price point of Rs 4 lakh.

Sawhney says Renault has the systems in place to hit the market hard this year with its two products. These largely comprise the sprawling plant in Chennai and the tech centre with nearly 5,000 qualified people working on a host of projects. It was the Logan experience that was the turning point for Renault to think more local for the market and, yet, stay tuned to a global vision. It is here that India could become an important hub for export of the small car to the ASEAN region.

The used car business is also on the company’s radar as any potential MPV buyer is likely a car owner looking to trade-in before opting for a replacement. Renault has created a team which is working on launching the business later this year. “Based on 2013 and 2014, we are the No 1 European brand though we are just three years old. The track and ambition is very clear: we want to be a significant player in this country,” declares Sawhney.