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Renault adopts top to down strategy in India, set to launch five new cars by 2012

Marking re-entry in the market, where your first term was not even worth of mentioning, is not a child’s play. This is what the French car maker Renault has managed to do successfully. After its initial unsuccessful debut in the Indian market, where it jointly manufactured Mahindra Renault Logan (Mahindra Verito) sedan with Mahindra & Mahindra, the company has successfully re-entered in the country with premium sedan Renault Fluence.

To the surprise of many, the Fluence sedan is performing considerably well, even more then what company was expecting from it, initially. The Fluence model clocked the sales of 500 units in the period of initial two months of its launch, as compared to Renault India’s expectations of selling 400 units during the same period. Carrying a starting price tag of Rs 12.99 lakh, the Fluence is giving a tough fight the competitors like Honda Civic, Chevrolet Cruze, Skoda Laura, Volkswagen Jetta and Toyota Corolla Altis.

The French car maker has already made it clear that this time around its approach will be top to down. This is the same strategy adopted by the German auto giant Volkswagen in India, about a few years back. Volkswagen first established its premium segment models like Jetta and Passat, and then debuted in the compact car segment with hatchback Polo and entry level sedan Volkswagen Vento. The similar strategy working very well for the Japanese Toyota in the Indian market, as company has recently expanded its portfolio to the compact cars with launching entry level sedan Toyota Etios and hatchback Toyota Etios Liva. Earlier, Toyota had been selling only premium segment cars in India including premium sedan Toyota Corolla Altis, MUV (multi utility vehicle) Innova, SUV (Sports Utility Vehicle) Fortuner and premium luxury sedan Camry.

The top to down approach is very much essential in building the brand image among the car enthusiast before expanding the portfolio to volume driving compact car segment. Renault plans to first strengthen brand image with launching high quality premium segment vehicles and then promising to carry the same quality and technology to the lower price segments. For instance, how many of you would like to buy a BMW hatchback offered in the price segment of Rs 5 lakh, I am sure many of you would love to own this lower segment BMW brand car. This is the magic of top to down approach, especially in a country like India where brand name bears more importance than anything else.

The strategy adopted by Renault in the second term, shows a great amount of learning it grasped during the unsuccessful first term with Mahindra & Mahindra. The Mahindra Renault Logan was a flop show in the country, as its sales never reached to expectation levels, until Mahindra parted its ways with Renault and started selling the car with different name – Mahindra Verito. One more failed project with Bajaj to develop an ultra low cost car, cautioned the company once again to go independent in the country with more focus on strengthening its brand image.

It Seems like Renault has learned a lesson or two from these few largest international auto makers. The company has planned-up five new car launches for the Indian market over the period of next 18 months. After successfully launching premium sedan Fluence in India, Renault now all set to roll-out luxury compact SUV – Renault Koleos, in the country by this year end. The Koleos model will be launched in the price segment of Rs 20 to 25 lakh, where it will be fighting for space with the established players like Honda CR-V, Ford Endeavour, Chevrolet Captiva, BMW X1, Toyota Fortuner and Nissan X-Trail.

Third model would be a premium hatchback that will be launched in the country by first quarter next year. The car will be powered by the same engines (1.2L petrol & 1.5L diesel) as used in its global partner Nissan Micra hatchback in the country. Initially, the Renault hatchback will be assembled at the Chennai plant of the firm, followed by its manufacturing at the same plant, gradually after a few months.

Covering one more segment by the middle of next year, the company will launch premium SUV – Renault Duster in the price segment of Rs 10 to 14 lakh. The Duster model will be taking on with the likes of Mahindra Scorpio, Tata Safari and Skoda Yeti. The details of the fifth model, which will hit Indian roads by the end of next year, are yet to be revealed by the company.

Unlike Nissan, Renault will be focusing more in the Indian market with launching more and more India centric car models. Nissan currently exports 80 percent of its cars manufactured at its Chennai unit.