Renault aims for more agility in India, reaffirms Nissan's role

Time of India

25-04-2025

HighlightsRenault takes full control of Chennai plant by acquiring Nissan's 51% stake, aiming for faster decisions and 50% capacity increase by 2030. Nissan remains a product partner despite the ownership change; operations, workforce, and alliance activities continue unchanged. Five new models coming in 2 years, including B+ and C-segment SUVs like Duster and Bigster, with a target to regain 3% market share by 2028. Focus on boosting domestic demand, with Renault pushing for higher disposable incomes, echoing Suzuki's view on affordability challenges for over 1 billion Indians.
Renault India
is confident that there will be greater agility in its India plant operations following the decision to buy out
Nissan Motor
's 51% stake in the manufacturing alliance.
'This acquisition is basically about having one chef in the kitchen and making sure we bring more efficiency into the whole ecosystem. When you have one master, you can decide to bring what products you want and when,'
Venkatram Mamillapalle
, Country CEO & MD,
Renault
India, told ET Auto.
This acquisition is basically about having one chef in the kitchen and making sure we bring more efficiency into the whole ecosystem. When you have one master, you can decide to bring what products you want and when.Venkatram Mamillapalle
At present, capacity utilisation in the Chennai plant is 48% and with Renault now in the driver's seat, this situation will 'improve faster'. As he put it, a solo player was better than having two partners making decisions and then awaiting approvals from finance, legal, HR etc while the clock ticked away merrily .
'It is akin to a whirlpool where things are constantly spinning but with one chef now in the kitchen, there will be faster decision making,' said Mamillapalle. Renault India is now keen on a 'quick increase' in plant capacity by 50% before getting into complete utilisation by 2030.
Nissan role vital
The MD was quick to clarify that all this would be done with both Renault and Nissan products even though there was a change in the equity alliance structure. Nissan had originally started off with 70% in the manufacturing JV before reducing it to 51% and has now sold this stake to Renault which will hold 100% in the plant operations.
'We will continue to make Nissan and Renault vehicles. Hopefully, we are in the right direction and I have no doubts that the alliance partner will remain. Renault Nissan Technology and Business Centre India will also continue the way it is without any disturbance. Likewise, the people who are in the factory will continue to work for us,' said Mamillapalle.
We will continue to make Nissan and Renault vehicles. Hopefully, we are in the right direction and I have no doubts that the alliance partner will remain. Renault Nissan Technology and Business Centre India will also continue the way it is without any disturbance. Likewise, the people who are in the factory will continue to work for us.Venkatram Mamillapalle
By the end of the day, it is just a 'change of master' at the helm with Renault now taking charge. Otherwise, it is business as usual at the plant operations in Oragadam near Chennai with the manpower remaining intact. 'There is good faith between the partners and no change in hierarchy just because of the 100% stake now being held by Renault,' he added.
The French carmaker has already made known that its next course of action will see five vehicles roll out within in the next two years which will include SUVs in the B plus and C segments. There are no delays or hiccups which means the Duster and Bigster models are on schedule.
Higher market share
'Currently we have a product portfolio that is decided till 2027 and the rest is in the pipeline. We working in that direction and from now till 2027-28, we should bring back our market share to at least 2.5 to 3%. Then you add a few more products with new energy vehicles and the share will be up further to over 3%,' elaborated Mamillapalle.
Read more:
Renault launches new design centre in Chennai, its largest outside France
Asked if he was concerned about the current levels of global volatility following Donald Trump's new tariff era, the Renault India chief said such hurdles were part of business while driving home the point that manufacturing 'is not artificial intelligence' where problems can be solved in a jiffy. On the contrary, all these issues remain imminent threats but will eventually be resolved with time and perseverance.
'When COVID emerged first followed by the chip crisis, it was a big challenge. Then came the Russian war on Ukraine with no end in sight. These things happen all the time and we managers should handle it. This is a business that we are responsible for, else you do not need CEOs or presidents,' he said.
When COVID emerged first followed by the chip crisis, it was a big challenge. Then came the Russian war on Ukraine with no end in sight. These things happen all the time and we managers should handle it. This is a business that we are responsible for, else you do not need CEOs or presidents.Venkatram Mamillapalle
Whilst on this subject, Mamillapalle also made it clear that there was no point opting for protectionism in a dynamic world environment. The US, for instance, is sending out a clear message that in the quest for MAGA (Make America Great Again), global trade will need to be accompanied by reciprocity in tariffs. Likewise, countries like India have also been pushing for greater levels of self-reliance when pushed to the wall by China.
Planning for contingencies
'In a business where you are exposed to the rest of the world, you cannot remain in solitude. Neither can you de-risk everything. Sure, you need to plan for contingencies and every action/activity should have a Plan B or contingency risk aversion options,' said Mamillapalle.
In his view, the top priority was to focus on stabilising internal market growth which would help from the viewpoint of keeping a country insulated from unpredictable scenarios like the present round of tariffs imposed by the US. Being a potentially 'massive consumer economy', there was no reason why car production would not reach 10 million units in India going forward.
Read more:
Nissan may be down now but is not out yet
Mamillapalle then cited recent moves like the Budget exemption on Income Tax which were welcome initiatives and 'short-term injections'. However, this was clearly not enough. 'We need something on a long shot to increase consumption in the country. When this happens, issues of threats coming in from outside like logistics,tariffs etc have no meaning and that is the most important thing that we need to focus on,' he explained.
Mamillapalle then cited the example of the Indian two-wheeler industry which was clocking production of around 20 million units annually. 'This segment is a consuming economy and the day is not too far away when this trend will be happening in cars too,' he said. For this to happen, there needs to be higher levels of disposable incomes across the country and not concentrated to a few regions in the south, west and parts of the north.
Suzuki observations
Interestingly,
Suzuki Motor Corporation
has referred to this reality in its Integrated Report 2024 which was published early this year. The company said it was aware that in India's total population of 1.4 billion, the primary customer base it serves is about 400 million people who can afford a car.
'Recently, internal discussions at Suzuki have increasingly been focused on how we will monitor, understand, and build relationships with the income segment of roughly one billion people, primarily agricultural workers, who do not yet earn enough to afford a car or motorcycle,' stated the report.
Recently, internal discussions at Suzuki have increasingly been focused on how we will monitor, understand, and build relationships with the income segment of roughly one billion people, primarily agricultural workers, who do not yet earn enough to afford a car or motorcycle.Suzuki Motor Corporation Integrated Report 2024
With India being a vast country comprising diverse ethnicities, the company said it was crucial to penetrate into the hinterland thoroughly, closely observe people's daily lives and think more deeply about their needs.
'We are exploring how Suzuki can help solve people's everyday problems and raise the standard of living for individuals. To do so, we believe the answers lie in the genba, genbutsu, genjitsu (actual place, actual thing, actual situation),' the report added.
Two points of view with the same objective: how does one increase the penetration of cars in India? Renault believes that India's time will come so long as the right moves are made in putting more money into people's hands while Suzuki's outlook is more profound and even philosophical on the reality of affordability among the masses when it comes to buying a car.
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