Renault plans under Rs 4 lakh car

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French auto-giant Renault is working on a global project for a budget car for developing markets, which will be positioned under the Rs 4 lakh category in India.

“We have projects for below Rs 4 lakh car. We will share details about that soon. It’s not a project for India only, it’s a global project of Renault,” Marc Nassif, managing director, Renault India told Business Standard on the sideline of launch of its first mass-segment vehicle, Pulse here.

Nassif categorically mentioned that the proposed car will be positioned above Rs 2-lakh. “In India you have Nano priced below Rs 2 lakh. I do not know who and how some will go there. about 50 per cent of the market here consists of car priced between Rs 2-4 lakh,. We are not there and will definitely like to be in that segment,” he said.

However, he refused to give a timeline for the same as the car can not be developed in the existing platform of Renault-Nissan alliance plant at Chennai. “We need a new platform. We have 650 acres in Chennai plant. We have enough land for a new platform,” he added.

“Our manufacturing is globally a joint venture with Nissan, and it will continue to be the same if we build a new platform in the Chennai plant,” a spokesperson of Renault India said.

Nissan and Renault share platforms, engines and transmissions as well as components in India and globally. While Nissan’s main focus so far has been on the export market in India, Renault plans to develop the local market.

The Franco-Japanese alliance signed an MoU with the government of Tamil Nadu in 2008 to set up a manufacturing plant at Oragadam, near Chennai with an investment of Rs 4,500 crore over a period of seven years. The plant inaugurated in March 2010 has an initial capacity of 200,000 units per year and can reach 400,000 units per year in full capacity in the future.

As per the existing agreement, Renault has a 30 per cent offtake arrangement.

Interestingly, Nissan has also expressed its keenness to make its entry under the Rs 3-lakh space, where the Maruti Alto is the market leader and competing with Hyundai’s recent offering Eon.

After severing ties with the home- grown auto major Mahindra & Mahindra in 2010, French auto maker Renault started its solo journey last year with in the Indian market with the sedan, Fluence which was followed by the luxury SUV, Koleos and recently launched hatch-back Pulse.

“We have seen good response so far. Our delivery started last year June onwards and last year we sold about 1500 units. By the end of 2012 we will have five models and 100 outlets from the current 35. We hope this will help us to drive volumes from 2013 onwards,” Nassif noted. The company plans to add a high-end compact SUV, Duster and another sedan in its portfolio by the end of 2012.