India to play greater role in Renault-Nissan’s global plan

The Indian passenger vehicle market is yet to reach a firm growth base but it is capturing increasing share in the global plans of Renault and Nissan. In a global media interaction session at the Tokyo Motor Show, Carlos Ghosn, chairman and CEO of Renault and Nissan, said that though India currently doesn’t play a major role in the current mid-term plans (5 years) of Renault and Nissan, it will play a crucial role in the next mid-term plan of both companies. Both companies’ next mid-term plans will be firmed up next year.

In addition to the relatively low car penetration level in India and the huge potential customer base, there are other reasons why India is growing more important for Renault-Nissan and maybe for other foreign multinational companies. India is seen as the most promising market in the emerging BRICS (Brazil, Russia, India, China, South Africa) markets.

“Among the large markets of the world, India is the market with the highest growth in 2015. It will end up seeing a 7-8 percent growth. We think it will continue. We can envision India will be in the top level of growth among the large markets for the next 2-3  years," Ghosn said in response to a query from Autocar Professional. 

This is a stark contrast to the 50 percent fall in Russia in three years and a 40 percent fall in Brazil in the last two years. The growth rate in China is also slowing down, but its base is much higher than India.

“For all carmakers, India is becoming more and more important because there’s growth and two car manufacturers having 70 percent of market share. So, everybody thinks there’s opportunity here. Atleast the small guys thing they can do a better job. And we are part of the small guys,” added Ghosn. He also commented that India is a complicated market.

It is to be noted here that Renault’s recent launch, the entry level model Kwid, has got off to a good start with over 50,000 bookings in a little over 30 days after launch on September 24. Nissan’s new entry level model, under the Datsun brand is expected to be launched in March 2016, when the brand celebrates its second anniversary in India.

These are the first set of models based on the Alliance’s CMF-A (Common Module Family – A segment) platform. These, and some future models on the platform, will also be exported from India to global markets which will aid profitability of the companies in India. Nissan is also learnt to be tweaking its strategy for India, the results of which are expected to kick in in after 3 or 4 years.

Ghosn says that the global car industry at best will see a two percent growth this year, and after that it is likely to plateau for the industry. Therefore, Renault and Nissan will enhance its efforts in countries like India and Africa and also look towards developing newer markets.