With the country moving to BS VI fuel emission standards, French automobile maker Renault has decided to stop manufacturing diesel cars by the end of this year. The company said it does not make sense for it to sell diesel vehicles in the personal segment. It plans to launch three vehicles by 2022, including a sub-4-meter SUV in the second half of next year and an EV by 2021.
The company started exporting its recently launched sub-4-meter car to South Africa, after selling over 20,000 units in India. It expects Triber sales to grow to 40,000 next year. The BS VI version of the model is expected to come out in January 2020.
"We are ending the K9K diesel engines. From December 31, 2019, we are done with diesel vehicles. We are going to stop Lodgy (multi-purpose vehicle) this year. The decision is because of the BS VI transition," said Venkatram Mamillapalle, country CEO and managing director, Renault India Operations.
Diesel vehicles will not match the economics of petrol-driven ones in the personal segment, if one compares the acquisition cost with mileage. Going forward, people would buy diesel mainly for specific reasons, such as more power. Besides, the technology has more risks when it comes to BS VI testing.
"We don't want to take the risk, we want to be clear and want to do away with the borderline cases of BS VI," Mamillapalle told reporters. The company had diesel versions of Duster and Lodgy. Duster will continue to run on gasoline. Diesel is a very small volume for the company, at about 4,000-5,000 vehicles.
On the future launches, Mamillapalle said, "We want to work 360 degrees on Triber, and push as much as possible because we are yet to reach more customers. During the first six months of next year we will be focusing on this and the next six months we'll have a new product coming into the market, which is a sub-4-meter SUV."
Renault will bring in an EV by 2021-end or in early 2022. Details of another vehicle launch are being kept under wraps. The firm is planning one product a year, but needs to space out so that it doesn't cannibalise its own product. In terms of electric vehicle, the ecosystem has to be developed for growth.
It also plans to expand its dealer network to another 100 outlets by 2022 from 258-270 showrooms currently. While plans were to expand the showrooms to 293 dealers, the company has been able to only achieve 267 so far, due to the slowdown.
Renault started exporting Triber with the first batch of 600 vehicles to South Africa. It will despatch another batch next February and will take a call on further exports of the model, depending on demand. It is also looking at exporting to other countries.
Exports for the company constituted 14-15 per cent of sales (11,999 units last year as against 83,000 sold at home). This year it expects to export 13,000 units, officials said, even as it hopes for a revival of the domestic market.
Mamillapalle said he hoped the Union Budget would bring in the necessary changes to revive the economy, and was particularly looking forward to a significant correction in GST. He said the auto sector definitely needs a correction in terms of lower rates. He hoped income tax will also take a course correction, and said the industry is also expecting some significant foreign direct investment reclamation. The current protests in the country will disturb the business.