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Renault is planning an entry into a wider range of segments and the company is planning to expand its vehicle portfolio as well. Renault has a 24 per cent Total Industry Penetration at the moment and aims to have 50 percent penetration. The company believes that making a multi-segment entry will boot sales and presence. In order to kick start their campaign, Renault is planning to launch a compact sedan.
According to Auto Car India, Renault says that filling gaps in its portfolio is the key to sales in the Indian markets. They aim to achieve a target of 2 lakh units by 2022. In addition, Renault has set a target of 1 lakh units for its upcoming Renault Triber that has been added to the portfolio.
Renault, and its partner in India, Nissan, depend on volumes to make profits. The Renault Nissan Automotive India Pvt. Ltd., has an annual production capacity of 4.80 lakh units a year, and feel it is important to be at capacity. Under-performance of the Nissan and Datsun portfolios also add to low sales figures.
Global car makers often stay away from the high volume segments that are dominated by Maruti Suzuki. The reason being profits depends on volume sales, and, margins are very low. Renault is looking for an opportunity to play against the market leader and make a presence felt in the competitive segment. Renault needs this in order to increase sales and margins. Their sales suffered a 41 per cent drop in volumes to just 79,654 units in the last financial year. Sales stood at 1,35,123 units during financial year 2017.
Renault is hoping that the soon to-be-launched Triber will be a hit. They expect to retail over 65,000 units in 2020 (the first year of production). The Renault Triber will feature a 1.0-litre BR10 petrol engine with higher tuning. A turbo-charged variant is also in the works and may be mated to an automatic transmission.
The company also plans to to launch a compact SUV soon. The compact SUV, codenamed HBC, is most likely to feature a 1.0-litre three-cylinder turbo-petrol engine. No diesel variant has been heard of as yet. Renault wants to launch the HBC at some point in 2021.
Renault also dropped hints that a compact sedan may be in the works. The sedan, codenamed LBA is expected to be built on the CMF-A platform that was seen on the Renault Kwid, and will feature the same power options as the HBC. Nissan is also designing a few vehicles using the same platform.
Renault will also launch a facelift of the Duster in India. The current second-generation of the Duster is currently available in international markets but not domestically. Renault is thinking of moving the Duster to Nissan's CMF-B platform. This will result in an increase in global sales. The Duster is currently built on the MO platform that is available in select markets.
Thoughts About Renault Launching A Compact Sedan
Volumes have always been a key in overall profits - for every product in every industry. Renault needs a breakthrough in the compact and hatchback segments to make any form of India specific profits.