The Telegraph
Since 1st March, 1999
Email This Page
Renault joins small car race

Mumbai, June 14: French auto maker Renault is planning to make a low-cost car for emerging markets like India that will sport a price tag of around $3000 (Rs 1,23,000).

The price will probably be higher when it hits the road because of local taxes, but it should give market leader Maruti Udyog and, possibly, Tata Motors a run for their money. The Tatas plan to launch their small car sometime next year with a sticker price of Rs 1 lakh, pinning their hopes on special tax breaks for what promises to be a people’s car.

In April, Renault and partner Mahindra and Mahindra launched the Logan — a mid-size sedan especially developed for the emerging markets — which has evoked tepid interest in a highly competitive market. At that time, Renault president and CEO Carlos Ghosn had indicated that they would start working on plans for a small car soon.

“Yes, we are thinking of developing a car which is more competitive than the Logan,” a spokesperson for Renault told The Telegraph from France. She said it normally took around three years to develop a new car, but no date had been set for the new low-cost car.

Le Figaro, the French newspaper, reported on Thursday that the proposal for the small car would be placed before Renault’s management board very soon. The plan is to establish a technical centre in India to develop the small car which will not be a stripped down version of the Logan.

The centre, which could employ up to 1000 engineers, will be the third in Renault’s global set-up. Renault, the report added, wants to compete against Tata Motors’ Rs 1 lakh car.

Mahindra Renault began a phased-wise launch of the Logan starting with Mumbai on April 9. The company plans to manufacture 50,000 units of the Logan from M&M’s Nashik plant by July. The Logan made its debut on April 3 with a host of features at a price tag of Rs 4.35 lakh to Rs 5.76 lakh for petrol versions (ex-Delhi) and Rs 5.54 lakh to Rs 6.51 lakh for the diesel version.

Recently, Mahindra Renault said the Logan had notched up 3000 bookings since it was launched in April and over sales of 1500 units in May. Back in February, M&M, Renault and Nissan announced a joint venture to produce cars at a unit near Chennai for an investment of Rs 4,000 crore.

The plant, which will produce models for all the three partners, will have a capacity to produce 400,000 cars and utility vehicles.

It is not clear whether the French company will collaborate with M&M and Nissan in the low-cost car project. If it does, there is a strong possibility that it will decide to make the car at the proposed Chennai plant.

At least 60 per cent of the passenger cars sold in India, are small cars and a host of players are planning to enter the segment which is dominated by Maruti Suzuki.

Reports say Volkswagen AG wants to make an Indian version of the Polo small car in 2009. General Motors India is eyeing a 15 to 20 per cent share in the small car space by 2010, said general manager (sales) Sumit Sawhney.

Toyota also plans to make an ultra-low-cost car and India could be one of the locations.

Email This Page