Earlier, there were some rumours and speculations that Renault is working on a Kwid-based compact sedan. According to some reports that emerged last year, the manufacturer is working on a compact sedan based on CMF-A platform, developed by Renault-Nissan Alliance.
But now, a new report from Autocar India reveals that Renault might have decided to drop those plans because of the decrease in demand of the compact sedans in the country. Another main reason to drop the plan will be the new GST tax structure.
The yet-to-implement GST tax structure might cut down the special tax benefits that are currently received by cars under 4-metre in length. And because of this new tax structure, the compact sedans in the country will lose their popularity.
Also, the demand for the compact SUVs in the Indian subcontinent is increasing. Customers who are upgrading from hatchbacks are either preferring crossovers or compact SUVs over compact sedans.
All these reasons have forced Renault to rethink its strategy to enter the compact sedan segment at this point in time. The French manufacturer will now likely focus on developing premium hatchbacks and crossovers on the modular CMF-A platform.