Break-even in three years, says new Renault India head

The India arm of French automobile maker Renault aims to break even in the next three years.

The company had losses for the past two years. It says a turnaround will be supported by volume growth, driven by coming product launches.

Three weeks earlier, amid volume drop and losses, Venkatram Mamillapalle took over as managing director of Renault India. He told Business Standard the medium-term plan is to double annual volume to 150,000 units and achieve break-even.

He is optimistic on this although overall retail passenger vehicle sales in the country dropped 8.25 per cent and domestic sales by 1.1 per cent in the first nine months of this financial year. Industry data show the company’s domestic sales declined 26 per cent over a year before.

“The current industry scenario is just a blip. We are not a small country and penetration of cars is low. We (in Renault) will address the familiarity challenge,” said Mamillapalle. The plan is for two new products during the second half of this year and next year, apart from facelifts of the Kwid and Duster.

The two new products will, says Renault, create a new segment and help the aimed doubling of sales and a five per cent market share.

“We don't have the energy or interest to attack the entire Maruti or other big boys' portfolio; we are not in the race with the big boys. We will create our own segment; let them chase us,” said Mamillapalle. At present, Renault's Duster, Kwid, Captur and Lodgy address 24 per cent of Maruti's portfolio. The new products are to be designed, engineered, developed and manufactured in India, for India and India-like markets. “We will not piggy-back on (our) global products,” said Mamillapalle.

He said they would be ready with products to meet the official standards of BS-VI emissions or electric vehicles. The challenge in the latter is infrastructure, including charging stations and roads, and prices of electricity, said the MD. One aim is to make their dealers profitable, as an input in the company’s turnaround.

The number of dealers will not be raised but it would look at increasing the number of outlets through the former, especially in rural areas. It presently has around 120 dealers.

"We don't have energy or interest to attack the entire Maruti or other big boys' portfolios and we are not in the race with the big boys. We will create our own segment, let them chase us”