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'A-segment cars to bounce back soon, Kwid to stay as long as viable'
Renault India Chief Executive Officer and Managing Director Venkatram Mamillapalle said the company will launch five new products over the next two years. In an exclusive face-to-face interview with Business Standard's Shine Jacob, he discusses the future of the Kwid, Renault's acquisition of Nissan's Chennai manufacturing unit, upcoming launches, and the company's roadmap for growth in India.
1. How do you see the future of A-segment cars, including the Kwid?
This is a very paradigm-shifting question. We have only two players and two cars in the segment. Both are more or less stable in their respective space and size. There's no doubt that the segment itself is rapidly diminishing. In my opinion, it won't be long before the segment makes a comeback.
The moment people start viewing cars as a commodity and not a luxury, this segment will return. That evolution will happen with the maturity of the buyer. Until then, the segment's survival remains a question. Our objective is to continue producing the Kwid as long as we can sustain it in the market.
2. You recently acquired Nissan's stake in the Chennai manufacturing unit. What does this mean for you?
It's like putting our foot down and telling Indian consumers we are here to stay. We believe in the Indian market, we want to grow, and now we have full control over a plant with a 480,000-unit capacity. Owning the facility helps us make decisions faster, which is why we acquired the stake.
Currently, we are exporting only right-hand drive models. We are exploring exports of left-hand drive (LHD) vehicles and are in discussions to launch them soon.
3. How are you planning to improve capacity utilisation and sales?
Right now, our capacity utilisation is around 48 per cent. The five new product launches over the next two years will add volume, taking us to about 280,000–300,000 units—equivalent to 65–70 per cent utilisation.
We also have plans for additional product enhancements and will continue producing Nissan models. Combining our portfolio with Nissan's will help optimise plant capacity. The new launches will also include electric vehicles (EVs).
4. You had a tough year in 2023. How do you expect the market to evolve by the time you complete these launches?
Launching a new model brings novelty to the market. We will enter new segments, moving beyond the sub-Rs 10 lakh space to models priced above Rs 10 lakh, which should support our growth.
Today, we have 362 outlets and 240 service centres. With new products, we'll need to scale this up. We'll focus on expanding in areas where market concentration is high.
5. What role will EVs and alternate energy sources play going forward?
EVs currently represent less than 2 per cent of the market. Their adoption will grow either through incentives or penalties—targeting both customers and OEMs. However, the supporting ecosystem, such as charging infrastructure and power availability, must evolve. This needs to be driven by government planning and policy. From my perspective, EV market share could rise to 12 per cent by 2032.
Strong hybrids are more favourable in the current context and will take a significant market share if EVs don't take off. Additionally, compressed natural gas (CNG) and gasoline vehicles will thrive due to stronger existing ecosystems.
6. You recently opened a design centre in Chennai. How significant is this in Renault's global strategy?
This is Renault's largest design centre outside France and one of just four worldwide. The Indian market is set to boom, with launches happening at unprecedented speed. To respond quickly, we need everything nearby, under full OEM control.
India offers a rich talent pool at competitive costs. The centre will not only support our domestic operations but also contribute to Renault's global business.
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