We have not yet arrived, says Renault CEO Sumit Sawhney

Sumit Sawhney Country CEO of Renault India at the Launch of "Renault Captur-SUV" during the Press Conference in New Delhi on Monday. (Photo: Dalip Kumar)
French car maker Renault, which is seeing a double-digit decline in sales in a growing domestic market this year, has expanded its product portfolio by launching a new SUV, Captur. The company's second SUV (after Duster) is priced at Rs 9.99 lakh onwards (ex-showroom) for the petrol variant. The diesel variant begins at Rs 11.39 lakh and goes up to Rs 13.88 lakh. Captur will compete with popular SUVs like Maruti Suzuki Brezza, Hyundai Creta and Ford EcoSport among others.

A lot rides on this new vehicle for Renault, the seventh largest player in domestic passenger vehicle market. In the first half of FY18, the company's sales in domestic market shrunk 22 per cent to 54,447 units when the industry clocked a volume growth of over nine per cent. Sales from Kwid, a model that brings over 80 per cent of the sales, has slipped 20 per cent during this period.

Riding on Kwid's popularity, last year, Renault expressed confidence of reaching a five per cent market share by end of 2017. It holds a share of 3.3 per cent during the first half of this financial year.

Sumit Sawhney, Country CEO and managing director at Renault India says the company is 'still building a runway' in India. "I won't say that we have arrived. Our target is to reach five per cent and consistently sell five per cent in the mid-term," he said. Sawhney says the company has a limited product portfolio and the mini segment (where Kwid operates) is not expanding.

The company is hopeful that Captur will add volume. However, given the aggressive competition in the SUV space, Captur's volume will not help the company arrest the decline in sales. Captur, irrespective of its features and length (it is above four metres unlike EcoSport and Brezza), will have to compete with smaller SUVs which are priced lower.

Country's most sold SUV, Brezza, begins at a price of Rs 7.24 lakh. Creta starts at a price of Rs 9.28 lakh and EcoSport has an entry price of Rs 7.30 lakh. The recently launched Tata Nexon, another sub-four metre SUV, begins at Rs 5.85 lakh. Cars less than four metres in length attract lower taxes.

Captur may also impact sales of another Renault SUV, the Duster. Duster plays in a price range of Rs 8.48 lakh and Rs 13.79 lakh. Sawhney, however, says that there will be no impact on Duster's volume in the market. "These are apples and oranges. If we look at the other global markets like Russia and Brazil where Captur was launched, there is no cannibalisation".

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel