Renault’s Kwid compact car could be a game-changer in India

About a year-and-a-half after the reveal of the Kwid concept at the Delhi Auto Expo 2014 (the first Renault concept car to have been unveiled outside of Europe), Renault today had the global premiere of the production model in Chennai with CEO Carlos Ghosn taking off the covers of the low-cost entry-level compact car.

Ghosn’s presence at the event highlights the importance of this all-new product which is billed to be a game-changer in the Indian market. What’s more, given that it is a global product, it is likely over time, the Kwid could be exported from India.

Renault’s new car for India is likely to be priced between Rs 3-4 lakh and is slated for launch in the festival season this year. The very aggressive pricing is thanks to very high localisation levels (98%) with supplier sourcing increased to 60% in the Chennai region. The Kwid will also be the first car in its class to get a touch-screen infotainment system.

On the engine front, the Kwid will come with an 800cc three-cylinder engine. While it won’t have path-breaking technology, the development will be done with the best of Renault’s knowhow. Renault’s total investment in the Kwid project is around Rs 30 billion, which is about half of the usual development costs for a similar project.

“With the Kwid, Renault continues to pursue its strategy of accessible mobility for all to step up its international growth. Using a new Renault-Nissan Alliance platform and following the trail blazed by the Duster, the Kwid will enable Renault to continue its expansion and address the needs of customers who want a vehicle that is stylish, robust and easy to use” said Ghosn at the reveal.

First car on CMF-A platform

Looks-wise, there is nothing like the Kwid in the Indian market. The Kwid has short front and rear overhangs and high ground clearance (180mm), is 3.68 metres long and 1.58 metres wide. The Kwid, which has strong SUV cues, is the first car built on the Renault-Nissan Alliance’s CMF-A platform and it will be a global car, according to Ghosn. Thanks to this platform-based approach, the Alliance is able to go further in the developing an international, flexible product offering based on component sharing and high-performance architecture.

Like all the Alliance platforms, CMF-A is extremely flexible. The exterior styling and the powertrain can be varied significantly in order to match the specific requirements and preferences of customers, in India and on other international markets.

"CMF-A opens new horizons in terms of our ability to satisfy and even exceed the expectations of customers in countries where demand is currently highest, particularly those customers buying a vehicle for the first time. These influential consumers do not want a car that was initially designed for mature markets before becoming outdated. They aspire – and rightly so – to a modern, robust, elegant car at a price that represents a mini-revolution for such a remarkable vehicle," said Arnaud Deboeuf, Alliance senior vice-president, Renault-Nissan BV and Alliance CEO Office.

Renault says it has leveraged global assets in terms of cost management and delivery times to design and manufacture the Kwid. This involved use of resources and staff in France, Japan, Korea and India.

For example, vehicle testing took advantage of the Alliance‘s strengths by using different establishments to put the KWID through its paces: the body and chassis were tested in Japan, body equipment was evaluated in Korea and endurance tests were carried out in France, while India was the backdrop for overall and assembly testing.

India a priority market for Renault

India is one of Renault’s priority markets, along with Russia, Brazil and China. With a vehicle ownership rate currently standing at just 20 per 1,000 inhabitants compared with 105 in China, 300 in Russia and 600 in Europe, the Indian automotive market is expanding rapidly. In 2014, sales increased by 3.1 percent to reach 2,537,892 vehicles and volumes are expected to be around five million by 2020. As a result, India could become the world’s third biggest market by the end of the decade.

In a market where the A2 and A3 segments account for the bulk of sales (the A segment currently accounts for more than 30 percent of retail sales), a growing number of customers are keen to own larger, higher-end models. Against a backdrop of rapid urban development, customers in India are looking for more connected, sophisticated cars that are reassuring and designed for family use. Renault says the Kwid is aimed to meet these requirements.

Ghosn said Renault India is targeting a 5% market share as is Nissan India. So between the two carmakers, the Renault-Nissan Alliance could be looking at a 10 percent market share in India. The new Kwid on the block will have a key role to play in that game-plan.