Venkatram Mamillapalle, Renault Groupe’s newly appointed country chief executive officer and managing director, said driving quality across Renault Nissan Automotive India’s plant in Chennai was his priority as it sought to claw back market share and turn profitable as part of a stated mid-term plan.
If Renault becomes profitable, there will be a cascading effect on other organisations (alliance partners), said Mamillapalle, adding that, “as one team, one ambition,” he was working towards getting all the entities within the alliance aligned for profitability.
“It’s the same line which makes the Kwid, Duster and Datsun. If we improve the quality of the Kwid, it will benefit the Datsun. With my technical background, I am trying to push that knowledge on to the shop-floor to get the right quality. It’s alliance plant — it’s the cost centre. The plant has to generate volume so that the cost per unit is spread. That’s what we are doing,” said Mamillapalle. His previous stint as head of Renault-Nissan-Avtovaz Purchasing Organisation in Russia, will come handy in driving the objective, he added.
Passenger vehicle sales in India advance by a mere a 2.70 per cent to 3.37 million units over a year ago. Amid an intensifying competition and a broader slowdown in the passenger vehicle market, Renault has seen its market share and volume erode in India. Its share in the PV market slumped to 2.3 per cent during FY19 down from 4.43 percent FY17, according to Society of Indian Automobile Manufacturers (Siam). Its volumes dropped 22.08 per cent to 79,564 units in the year that ended in March 2019, over a year ago.
Mamillapalle has set himself an ambitious target — break even in three years and grab market share of 5 per cent by 2022, up from 2.93 per cent currently. He plans to achieve this by focusing on making differentiated products that will create new segments to avoid head-on clash with entrenched players; the company will also focus on making the dealers profitable which, in turn, will help in moving the volumes.
In the works are launch of two new products — Triber, a multi-purpose vehicle based on the Kwid platform that will go on sale in September quarter this year and a compact SUV codenamed HBC, next year. In addition, it will also introduce facelifts of Duster and Kwid later this year. Models, including the Capture and Lodgy, failed to take off owing to the company not having done enough on the communication front, he said.
“We missed out something and these models didn’t reach the hearts and minds of the customers, the way Duster did. With the Triber, we are trying to ensure we don’t repeat the mistakes,” he said.“They have a successful tem plate and they can do it,” said VG Ramakrishan, founding partner and managing director at Avanteum, a consulting firm, alluding to the successful innings of the Kwid and Duster.
The Kwid has been the only product that offered a formidable competition to Maruti Alto. Having said that launch of three to four models, at a competitive price and positioning and improving brand stickiness will be key to its revival.