Renault is on a transformational path to make its comeback in the Indian automotive market as it is basing its expectations on the fusion of nostalgic branding and the modernized business model. The French automaker is gearing towards a “make-or-break” recovery after the company had witnessed its market share decline to less than 1% in the past 10 years of its history. The revival will rest on the reintroduction of the Duster SUV- a name that historically generated greater brand-based recognition in India than the Renault parent company itself. The shift is an indication of the brand dropping the entry-level cost orientation that the brand previously had for a higher value-positioning.
Strategic shift and the new Duster
Renault, under the new CEO Francois Provost, is shifting away from the past philosophy of a car that fits all Indians. The company has ceased competing in the bottom of the market with low-cost, ultra-low-cost cars and is instead targeting the rapidly growing middle class in the country.
This segment desires appealing, competitive-based cars that can provide a feeling of prestige and technological ability. Such a re-strategy is crucial since Renault is under mounting pressure in its traditional European markets due to the emerging Chinese competitors such as BYD. With an emphasis on the high-end models, Renault will establish a profitable and sustainable business in one of the most promising automotive centers in the world.
The new Duster, which will be released on the Republic Day, January 26, is the foundation of this comeback. This model of the SUV has been constructed to meet existing safety and emission standards and also meet the changing preferences of the Indian customer. The new Duster will have a hybrid powertrain, the first of its kind in India, a technological breakthrough for the brand in this area.
Renault hopes that Duster will be able to generate between 130000 and 140000 units within one year. Renault will introduce a larger SUV, which is the provision of the type of the Dacia Bigster, and an electric car to add to the range.
New strategy and market dynamics
The new strategy of Renault is not restricted to domestic sales. The company has completely owned its manufacturing plant in the southern part of India with a capacity of 500,000 units per year. Renault will also utilize this plant as a competitive world export center, even though it will continue to produce vehicles on behalf of Nissan through 2032.
The brand is also moving its parts to India to manufacture other vehicles that are produced elsewhere, like South America. The strategy is similar to those of the international colleagues, such as Volkswagen and Stellantis, and involves leveraging the manufacturing ability of India to reinforce operations overseas and increase the strength of the national supply chain.
The Indian auto environment now looks different compared to when the Duster was initially introduced in 2012. In the past, SUVs controlled 10% of the market; now they control more than 50%. Tata Motors and Mahindra and Mahindra, domestic powerhouses, and Hyundai of South Korea have taken the gap left by widespread Renault stalemates.
Renault should have a fast rate of innovation to perform successfully, and according to the experts, the company would need to have new or renovated models every six months of time to keep the consumers captivated. The stakes are incredibly high for the French manufacturer, given that the Indian car market is expected to attain 6 million sales per annum by the year 2030.
Conclusion
The return of Renault in India is a strategic risk that depends on the power of its most recognizable nameplate and a more sophisticated perception of the contemporary Indian consumer. By focusing on the rising middle class and by bringing India into its global supply chain, Renault is not only seeking a short-term sales spike, but it is also seeking a growth pillar. Having achieved at least a 5% market share of the potential 6-million car market would be a game-changer for the company, as it would lock it in one of the few high-growth automotive markets remaining in the world.
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