After having ended its alliance with Bajaj Auto to develop a small car in the sub-R2-lakh category, French carmaker Renault has now decided to develop it for the Indian market along with its global alliance partner Nissan. Also on the menu now is another small car priced at R3.6 lakh which would compete with the likes of Maruti Suzuki India’s WagonR and Zen Estilo and Hyundai Motor India’s i10 and Santro.
For the low-cost car, sources said Renault is working towards an approximately R2.1 lakh price target (3,000 euros), which puts it between the Tata Nano and the popular Maruti Alto 800. To be developed with Japanese alliance partner Nissan.
The car is expected to hit the roads by end-2014 and will be manufactured at the group plant in Chennai. In fact, Nissan's Datsun will also launch a similarly priced model by the same time, the mechanics of which could be shared.
The second small car, with a higher price target of about Rs 3.6 lakh (5,000 euros) is also being developed alongside and will be priced below the Renault Pulse (the rebadged Nissan Micra).
Sources said Renault, which recently tasted success with the launch of its compact sport utility vehicle (SUV) Duster, is keen to make its presence felt in the small-car market since this is where volumes in India are. For instance, small cars (hatchbacks) account for 65% of the 2-million domestic car market. This segment itself is broken up into three sub-groups – micro, mini and compact, and Renault aims to have a product in each category.
However, officials at Maruti Suzuki and Hyundai Motor said on condition of anonymity that for any new player now to penetrate the small-car market would be very difficult considering the wide range of dealer network it requires. For instance, the dealer network of around 80,000 that Maruti has today in the country due to its early start is still the double of what Hyundai Motor has even though it entered the country with its small car Santro in 1998.
When contacted, a Renault spokesperson said, “All we can share with you is that there are plans for a car below the Pulse but it is at a very early stage of consideration so (it is) difficult to comment on the time or share any other details.”
Renault had started work on the low-cost car with Bajaj Auto in 2009 and officially announced it in 2010.