Renault Kwid challenges Maruti Alto, Hyundai Eon in Auto market

Chennai: To take on Maruti and Hyundai in the entry-level car segment, French auto major Renault today unveiled Kwid that will hit the market priced between Rs 3 lakh and Rs 4 lakh around the festive season this year.

Developed at an investment of around Rs 3,000 crore, the SUV-shaped small car will be powered by an 800cc petrol engine. The company is looking to make India a regional hub for exporting the new car.

"The Kwid will be a game changer and it will be in the entry-level segment that accounts for 25 percent of the Indian car market today," Renault Group Chairman and CEO Carlos Ghosn said here while unveiling the car.

He said Renault has set a target of cornering 5 percent market share in India and Kwid will play a big role in it.

"Renault Kwid will be a big contributor to our India growth story first, secondly in other emerging markets and then globally," Ghosn said, adding, "For Renault brand the milestone (for India) is 5 percent market share. Today we have 1.5 percent market share."

Car sales in India in financial year 2015 stood at 18,76,017 units compared with 17,86,826 units in the previous fiscal, up 4.99 percent, according to the Society of Indian Automobile Manufacturers (SIAM).

In FY14-15 Renault sold 4,006 units as against 10,367 in FY13-14, while in utility vehicles, it clocked 39,378 units as against 47,001 in FY13-14.

Dubbing the Kwid as "a car for conquest", Ghosn said: "Today we have no presence in the market (entry-level segment) and it (Kwid) has two main competitors Maruti Suzuki from one side and Hyundai Motor from other side."

While Maruti Alto800 is priced between Rs 2.83 lakh and Rs 3.4 lakh, Hyundai Eon is priced between Rs 3.09 lakh and Rs 4.22 lakh (ex-showroom Delhi).

Ghosn said one has to compare Kwid with competitors "for its potential" and the new car from Renault will be priced "between Rs 3 lakh and Rs 4 lakh and will be launched in the market around the festive season in September-November"

Expressing confidence of Kwid doing well in India, Ghosn said, at present, the products available in the entry-level segment offer either affordability or attractiveness or innovation, but the Kwid will offer all the three attributes.

Developed on Renault-Nissan Alliance's global CMF-A platform, Ghosn said it was a combined effort from engineers in France, Japan and India.

"We are marrying Indian skills with French and Japanese skills," he said, adding it was important for the Renault-Nissan Alliance to develop the platform in India.

Highlighting the significance of the Indian market, Ghosn said: "India is one of the the highest growth potential markets for the next five years. India and China are the only two markets with certain size with 6 percent plus growth potential per year."

"...In the next four-five years India can be the fourth largest market in the world after China, United States and Japan. Now is the time to develop...We are learning our own way and hopefully the success of Kwid will show you that we have learned a lot from Indian market."

The Kwid will have 98 percent localisation, he said, while adding that it could be exported to neighbouring countries only, as shipping to other emerging markets such as Latin America will not be cost effective.

"We are using the Chennai as a hub for the region without any doubt. For the region like South East Asia, countries surrounding India and maybe we export to other countries in limited quantities. Success of this car is based on heavy localisation. I don't think you can ship this car to South America. If you want to sell this car in South America you have to produce it locally," Ghosn said.

Previously, Renault's presence in the Indian hatchback segment was limited with Pulse with a starting price of Rs 5.03 lakh (ex-showroom Delhi). The company sells six models in India, including the popular SUV duster and newly launched MPV Lodgy.

At Davos last year, Carlos Ghosn had said Renault-Nissan Alliance was looking to have 10 percent market share. In the past, the Alliance had tried to form a partnership with Bajaj Auto for a low-cost car but didn't materialise.

The Alliance has a plant in Chennai where they have invested Rs 4,500 crore with an initial annual production capacity of four lakh, which can be scaled up to 4.8 lakh.

The plant exports to over 100 countries, making Nissan the third biggest exporter of cars from India. The Alliance employs more than 15,000 people in India.