Renault is back with a bang: What's the secret weapon?

Two carmakers, two tales. While Peugeot has decided to halt its India plans, after a brief interest, Renault is speeding ahead despite the unpleasant baggage of the Logan. What do we make out of them? For Peugeot, investing in India might be a bad idea, but for Renault, India is the happening place, the ‘preferred destination’.

Renault is taking one thing at a time with its new entry car project for India. “If things work out, India will be the preferred market to kick off the project,” Carlos Tavares, Chief Operating Officer, told Business Line in Chennai recently. And what’s the secret behind India turning to be the ‘preferred destination’? Renault’s partnership with Nissan.

[caption id=“attachment_312105” align=“alignleft” width=“380” caption=“Reanult’s high-end sedan, The Fluence.”]  [/caption]

The success of Renault’s India venture lies in its unique agreement with Nissan inked in March 1999, where the two share resources and explore synergies in purchasing, engineering, production and distribution in order to enhance productivity, according to Business Standard.

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Peugeot Citroen, Europe’s second largest car maker, recently announced that it was setting up a Rs 4,000-crore plant in Sanand, Gujarat that planned on rolling out 170,000 cars including its high-end 508 sedans by 2014. Although it wasn’t doing too badly in terms of sale in China and Russia, it suddenly announced that it was scrapping its Sanand plans on account of worsening economic conditions in Europe. Business Standard reported that this is the second time Peugeot has stalled in India-the first was in 1993 when they left after a labour dispute with Indian partner Premier.

Renault, too hasn’t had much luck doing business in India. The Logan Sedan, Renault’s joint venture with Mahindra & Mahindra ended in quite a disaster. But Renault’s notquitting. Renault says that it wants to put 100,000 of their cars into the hands of Indian drivers by 2013 which is an aggressive target by any standards. The famous French carmakers know that they have to face fierce competitors like General Motors and Volkswagen, amongst others, who are already well entrenched. Still, it feels that it can set itself apart from them.

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With the Fluence, Renault’s high-end sedan, a sports utility vehicle the Koleos and a hatchback called the Pulse, Renault is making a comeback with a bang! Two more products, the SUV Duster and another sedan will follow later this year. With five cars on road, Renault will cover half of the market, segment-wise.

In its efforts to woo Indians, Renault has also planned to make almost all of its cars have the diesel option, since it knows that 80 percent of all models sold in India where both petrol and diesel variants are offered, are diesel.

There’s more. The Renault-Nissan car plant near Chennai is set to nearly double its output for the third year with a production of 250,000 cars this year.

The unit set up by Renault Nissan Automotive India Pvt Ltd commissioned its second production line in March to achieve the fully committed capacity of over 400,000 cars a year.

There are too many things on Renault’s plate now. But will it finally succeed in India this time?