Renault’s revised strategic global growth plan has focus on India

The Renault Group is driving for aggressive growth in the India market and is already chalking out a new, geographical game-plan.

As of September 1, 2014, the Group is changing its international structure. To support growth during Phase 2 of its medium-term ‘Renault Drive the Change’ strategic plan, the current Asia-Pacific region will be split into two new regions.

While the new Middle-East India region will include the Middle East, the Gulf countries and the Indian sub-continent, the Asia-Pacific region will include China, ASEAN countries, Korea, Japan, Australia and Oceania.

By creating these two regions, Renault aims to ensure it has the organisational capacity to achieve the sustainable performance target of the strategic plan. The Group is present across six major regions around the world: Europe (including France), Euromed-Africa, Eurasia, Americas, Asia-Pacific and Middle-East India.

Bernard Cambier, a member of Renault’s management committee, has been appointed chairman of the Middle-East India Region. He has been tasked with boosting sales in India where Renault benefits from a strong production base at Oragadam, near Chennai, thanks to the Alliance, with the launch of several vehicles, notably based on the CMF-A platform and scheduled between now and the plan’s completion. Cambier will also oversee the resumption of commercial and industrial activities in Iran – in strict compliance with international accords – and more generally in the Middle East and Persian Gulf countries.

Gilles Normand, also a member of Renault’s management committee and chairman of the Asia-Pacific Region, will focus his operational management on rolling out production-related projects in China and on future strategic development in this region.

The French carmaker is also pushing for speedy growth in the Asia-Pacific region, one which holds high stakes. The current scope of the c region – which was redefined in 2012 – is very wide, covering 48 countries and 12 time zones (Middle East, Gulf Countries [GCC], India, China, Korea, Japan, the Association of Southeast Asian Nations [ASEAN], Australia and Oceania). This vast region is already dominant on a global scale, as it accounts for more than 50 percent of the world’s population, 40 percent of global GDP and 45 percent of the car market. While the Renault Group’s average global market share is 3.3 percent, this figure currently stands at 0.6 percent in this region.

Renault has three major production sites in Iran, India and Korea.

China and India are expected to become the world’s two leading economies within the next 20 years, carrying in their wake countries with strong growth potential such as Indonesia, Thailand and Pakistan. Between now and the completion of the strategic  plan, this region will represent close to 50 percent of Renault Group’s potential for growth – its overall highest.

The importance of these stakes, the number of strategic projects and the current size of the Asia-Pacific region are what led the Group’s executive management to divide this zone into two separate regions. The new structure will help strengthen operational management and enable dedicated teams to focus on a smaller number of short- and medium-term goals. Mongolia will join the Eurasia region, a market much more similar to its own.

Along with the countries of Southeast Asia (ASEAN), Japan, Korea, Australia and Oceania, the prospects offered by the Chinese market remain central to this reorganisation process. Since the signing of the JV with Dong Feng, the project has taken big strides forward, says Renault. With strong bases in Hong Kong, the priority of Gilles Normand and his teams will be to ensure project implementation in China by the end of the medium-term plan, prepare the region for rapid, significant volume growth, pursue the turnaround of RSM by ensuring sustainable profitability, roll out projects in ASEAN, and develop business in Indonesia, and build growth in the Pacific countries.