Renault India crosses $1 billion turnover in FY2023, registers profit for second year in a row

Renault India, the largest European car brand in the country has crossed a turnover of $1 billion for the first time in FY2023 ever as a better product mix, improved costs, higher exports and improved aftersales revenues helped the company register a strong operational performance.

While the turnover for Renault India grew 16% led by the Kiger hatchback and Triber SUV to about Rs 8612.5 crore or $1 billion, the company also posted profits a for the second year in a row as a result of a better model mix of all the available variants and upgradation of the same in line with customers aspiration, stated the company.

The carmaker’s net profit for FY2023 stood at Rs 403.5 crore or $ 48.52 million, 21% higher than FY2022’s Rs 333 crore, as per the annual report sourced from business analytics firm Tofler.

Reviewing the FY2023 earnings, the directors report stated: "Your company showing better profitability in FY22-23 is on account of better model mix of all the available variants and upgradation of same in line with customers aspiration. Besides, exports volume has demonstrated good increase year on year and better aftersales business contribution has fuelled company’s profitability."

In a 3.89 million units passenger vehicle market, Renault India with sales of 78,926 units had a market share of 2% in FY2023. Reflecting on the growth rates in calendar year 2023, the company said it is lagging behind due to the electronic chip or semiconductor crisis and material shortage which impacted the production pace.

In FY2023, India’s domestic passenger vehicle market grew 27% to a record 38,90,114 units, and exports too, at 662,891 units, were higher by 15 percent. On its part, Renault India with overseas shipments of 34,956 units, recorded a 45% YoY increase (FY2022 exports: 24,117 units). This gives it an export market share of 5%, improving on its 4% share in FY2022.

The company is working on infusing freshness in its product portfolio to seize back lost share. On the challenges faced by the company in FY2023, the directors report recapped the raw material shortage and supply chain challenges due to China-Covid that resulted in a steep increase of raw material prices. Furthermore, vehicle prices also went up by up to 5% from April 1, 2023 due to the implementation of the more stringent BS-VI Phase II emission norms.

Commenting on the disruptions for the future, the company said the mobility landscape is transforming with the ACES mega trend — autonomous driving, connected cars, electrified vehicles, and shared mobility – and Indian automakers are competing to gain a competitive advantage in this field. "Today, 10% of new vehicles sold globally are electrified. More than 2.5% of new cars sold are EVs in India. Lack of supporting infrastructure for EVs is also inhibiting sales," the report stated. 

Renault India believes that some of the key initiatives taken by government in laying out Rs 35,000 crore corpus for energy transition with a focus on achieving the country’s goal of net zero carbon emissions by 2070, customs duty reduction from 21% to 13% on lithium-ion cells and an extension of the subsidies on electric vehicle (EV) batteries for one more year are major demand boosters

"With green mobility identified as one of the priority areas, manufacturing, and adoption of alternative fuel vehicles, including EVs, has also received impetus," added the director's note.

Having established itself as the largest European brand in the Indian market with its mass market portfolio of the Kwid, Triber and Kiger, Renault along with its Alliance partner is upgrading and readying itself with a portfolio of new midsize SUVs and EVs for the country as Indian buyers seek more premium cars. 

Renault Nissan Automotive India has committed over Rs 5,300 crore in the coming five years as a next phase of its investment in India. The group envisages production of 350,000 cars per annum in the country by 2026, with new midsize SUVs planned for rollout in 205.

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