Renault-Nissan adapts in India

5 December 2011
NEW DELHI: Renault-Nissan, the automotive group, is taking a nuanced approach in India as it attempts to meet the unique demands of customers and business partners in the country.

Speaking to Forbes India, Carlos Ghosn, chief executive of Renault–Nissan, argued adapting to conditions in major overseas markets was unlikely to be a rapid process.

"When a large manufacturer or a large company comes to a foreign country, it has to learn," Ghosn said. "No market, particularly no market as sophisticated and as competitive as India, looks like other markets.

"That means you can't have the same approach and the same strategy in India that you have in China or in Russia or in Brazil. If you talk about BRICs, the four countries are so different from one another."

More specifically, Ghosn suggested the firm's alliances with Dongfeng in China and AvtoVAZ in Russia were more typical tie-ups between big firms, whereas India had a different "culture" of business.

"In India, it is a culture of private and family entrepreneurship," he said. "We need to take this into consideration and because of this we need to make sure we have many partners, each one bringing added value to the table."

At present, Renault is working with Bajaj and Ashok Leyland, and is drawing on lessons from the unsuccessful launch of the Logan with Mahindra & Mahindra, which was too expensive, insufficiently localised, and based on an unclear division of labour.

"In India, you learn smart frugal engineering. In India you learn smart frugal design. We are learning. That's why we think we need an Indian product – Indian-engineered," said Ghosn.

The company is thus now hoping to localise over 85% of its vehicles, and has recently built a new plant in India to facilitate such a process, alongside attempting to enhance the existing dealer network.

More specifically, the objective is to take a 10% joint market share for Renault and Nissan in the country, reflecting its overall position at the global level. The firms' current combined Indian share is around 1.5%.

"Obviously, it is very ambitious, competition is very fierce, so it is not going to be easy," Ghosn said. "You can expect our product line to be more rich and sophisticated in the entry level. We are currently planning and testing many products."

Nissan's Sunny and Micra are making progress here, and Renault recently launched the Koleos. "You can expect our product line to be more rich and sophisticated in the entry level. We are currently planning and testing many products," said Ghosn.

Data sourced from Forbes India; additional content by Warc staff
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