Renault throws down the gauntlet with Kwid

Carlos Ghosn believes that if there is one good reason for the Kwid to do well in India, it is because it has its genes here.

“To be successful in India, you need to develop the (car) platform in India. This is why I expect the Kwid to do better than any other car because it has its genes in India,” the Chairman and CEO of Renault said at a roundtable soon after it was unveiled in Chennai.

With 97 per cent localisation, there is no other car from Renault or Nissan with this level of in-house content. “The Kwid is the latest emanation of our belief in frugal engineering and there will be more to come. We will not stop in this journey,” reiterated Ghosn. Going forward, the Kwid along with the Duster and Lodgy will account for a major chunk of Renault’s volumes in India as it targets a five per cent market share by 2017.

To be priced in the ₹3-4 lakh range, the Kwid will take on rival models from Maruti Suzuki and Hyundai in a segment that attracts buyers by the droves. Not many people would have thought this scenario possible some years ago when Renault parted ways with Mahindra & Mahindra following poor market response to the Logan. The French automaker quickly figured out that the mantra was to think ‘global locally’ which meant creation of a robust engineering and R&D base within the Renault-Nissan alliance.

Ghosn, in his turn, has been unwavering in his belief about Indian skills since the time the Tata Nano’s price tag of ₹1-lakh stunned the global automobile industry nearly a decade ago. The Renault chief was convinced then that frugal engineering was the way forward especially for emerging markets where profits would be slow in coming.

Focus on frugality

“I am a big admirer of engineering in India because they are frugal and we (at Renault) have done it here. We have a technical centre, hired engineers and made a car,” said Ghosn. And if the Kwid does turn out to be a success, it would be the best tribute to India and how it can support global engineering.

According to Ghosn, there were enough sceptics in Paris and Tokyo who insisted that it was impossible to make the car at that price when the subject first came up nearly six years ago. They were convinced this was a pipedream which just could not become a reality. Ghosn then spoke to Gerard Detourbet, better known as the Father of Renault’s entry-level car programmes like the Logan and Duster.

“If you are bored with Logan I have a bigger task for you. But you have to do it in India and not in Japan or Paris,” Ghosn recalled telling Detourbet at that point in time. This was the beginning of the Kwid journey when work kicked off with suppliers and engineers. As Ghosn says, Detourbet was the “link between the knowledge coming from global markets and the creativity you can develop in India”.

It was amply clear that without one or the other, it was just not possible to go ahead with the project. This is the reason why the Renault boss says that the initiative could not have progressed had it been done it from France or Japan or, for that matter, in India with just Indian engineers. The need of the hour was, therefore, a fusion between knowledge and experience of different markets plus the creativity of Indian engineers. “We are marrying Indian skills with French and Japanese skills. The best way is to make people work together because you have the experience of global markets married with local creativity,” said Ghosn. Renault has identified India as the market for the Kwid, at least for now, given its vast size and potential. The country will also be the acid test to gauge the levels of competitiveness. If Renault manages to build good market share, it would be better prepared to stand the test of being competitive elsewhere too. This is where India’s role is critical in the build-up for the Kwid.

Ghosn said the car has the potential to head out to other markets in the world like South America, the Middle East, Africa and Eastern Europe. However, for the moment, the top priority would be India and, perhaps, the Asia-Pacific region. The next step could then be other emerging markets and, hopefully, the rest of the world. “We have to be humble and be realistic about forecasts,” said Ghosn.

Yet, there is no telling what surprises could throw up in the arena of market dynamics. When Renault first began making the Logan, for instance, it was meant largely for emerging markets but then Europe wanted a piece of the cake too. This may well happen with the Kwid too.

“India is not an easy market and we are learning our way. There is no market where you are right the first time. The Kwid is an important journey for India and the knowledge gained is precious for the group,” said Ghosn.