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    Renault's Ride Into India: Discussion Questions

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    Adhiraj Mukherjee
    1. Renault entered the Indian market in 2007 through a joint venture with Mahindra & Mahindra called Mahindra Renault. Their first offering, the Logan, did not sell well due to higher costs from importing parts. 2. In 2010, the joint venture dissolved but Renault continued investing in India. They set up a manufacturing plant in Chennai with Nissan to reduce costs through shared production and badge engineering of models like the Micra and Pulse. 3. Recent models launched by Renault like the Kwid, Duster, and Captur have helped generate more sales success by sourcing more local parts. The Kwid in particular has been competitive due to its low price of Rs. 2.

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    Renault's Ride Into India: Discussion Questions

    Uploaded by

    Adhiraj Mukherjee
    46 views1 page
    1. Renault entered the Indian market in 2007 through a joint venture with Mahindra & Mahindra called Mahindra Renault. Their first offering, the Logan, did not sell well due to higher costs from importing parts. 2. In 2010, the joint venture dissolved but Renault continued investing in India. They set up a manufacturing plant in Chennai with Nissan to reduce costs through shared production and badge engineering of models like the Micra and Pulse. 3. Recent models launched by Renault like the Kwid, Duster, and Captur have helped generate more sales success by sourcing more local parts. The Kwid in particular has been competitive due to its low price of Rs. 2.

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    1. Renault entered the Indian market in 2007 through a joint venture with Mahindra & Mahindra called Mahindra Renault. Their first offering, the Logan, did not sell well due to higher costs from importing parts. 2. In 2010, the joint venture dissolved but Renault continued investing in India. They set up a manufacturing plant in Chennai with Nissan to reduce costs through shared production and badge engineering of models like the Micra and Pulse. 3. Recent models launched by Renault like the Kwid, Duster, and Captur have helped generate more sales success by sourcing more local parts. The Kwid in particular has been competitive due to its low price of Rs. 2.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    46 views1 page

    Renault's Ride Into India: Discussion Questions

    Uploaded by

    Adhiraj Mukherjee
    1. Renault entered the Indian market in 2007 through a joint venture with Mahindra & Mahindra called Mahindra Renault. Their first offering, the Logan, did not sell well due to higher costs from importing parts. 2. In 2010, the joint venture dissolved but Renault continued investing in India. They set up a manufacturing plant in Chennai with Nissan to reduce costs through shared production and badge engineering of models like the Micra and Pulse. 3. Recent models launched by Renault like the Kwid, Duster, and Captur have helped generate more sales success by sourcing more local parts. The Kwid in particular has been competitive due to its low price of Rs. 2.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    Renault’s Ride into India

    Attracted by the growing market for automobiles that exists in India, various foreign automobile manufacturers
    have entered the country. One of them is Renault S.A., a France based company.

    Since its inception in 1899, Renault has steadily increased its presence in Europe and other parts of the world and is
    known for producing innovative, high quality cars. But it wasn’t well known in India until 2007. This year was
    significant since Renault attempted to enter the market in India through a joint venture with Mahindra & Mahindra,
    a leading automobile manufacturer. The first offering of Mahindra was called Logan. This car did increase
    awareness about the Renault brand in India, but it turned out to be more expensive than other cars in its segment.
    Mahindra Renault had sourced most of the parts of the Logan from abroad, and so it had been unable to keep its
    manufacturing costs low

    The lacklustre sales of Logan caused Mahindra Renault to suffer a huge loss and it was dissolved in 2010. However,
    this did not discourage Renault from investing further in the Indian market. It entered into a special licensing
    agreement with M&M so as to allow it to manufacture and sell the Logan under a different name, Mahindra Verito.
    In addition, the company slowly started expanding its operations in India.

    The next significant move of Renault was to set up a manufacturing plant in Chennai for the Renault-Nissan alliance
    a partnership that it formed in 1999 with the Nissan Motor Corporation of Japan. By sharing a plant, both Renault
    and Nissan could reduce their manufacturing costs and achieve economies of scale. They achieved further cost
    savings and reduced their time to market through re-badging, or badge engineering. Re-badging refers to the
    practice of a company marketing a product developed by another company as its own. The Nissan Micra and the re-
    badged version, the Renault Pulse are both manufactured at the Chennai plant.

    In addition to the Pulse, Renault manufactures and markets a few other cars such as the Fluence, the Koleos and
    the Duster in India. Lodgy, a premium Sport Utility Vehicle was launched in 2015. All these cars managed to create
    a buzz in the market. Nevertheless, the Duster is the only car that has managed to generate good sales. It has
    earned a good reputation among the customers.

    Now, Renault had been spending considerable money and efforts to increase its profits by developing a small, low-
    cost car that can find a mass market in India. These concerted efforts have fructified in the form of Kwid, a low
    cost car that has recently been launched at a price of Rs. 2.57 lakhs posing a stiff competition to the well-
    entrenched and accepted car, Alto (from Maruti Suzuki). By sourcing 97% of parts locally, it has been able to keep
    costs low and launch a uniquely positioned SUV at the lowest level of the car pyramid. Renault also intends to use
    India as a testing ground for this car, so that it can later launch it in other parts of the world. Recently, the Kwid
    platform has also been used to launch Redi-Go under the Datsun brand which is part of the Nissan family. Redi-Go is
    a hatchback and is priced from Rs. 2.4 lakhs.

    In 2018, the Renault Captur, a stylish Sports Utility Vehicle was launched. Renault’s partner Nissan observed that
    the Datsun brand had shown significant traction and accounted for about 75% by volumes. The joint entity currently
    sells around 40,000 cars per year.

    Discussion Questions

    1. How does the Renault Operations strategy provide competitive advantage?


    2. Re-inventing the entry level category is quite tough. Do you think the new products Kwid and Redi-Go
    would be successful? If yes, what may influence their success?

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