Department of Marketing & International Business

MBA Program
School of Business & Economics
BUS620 Marketing Management

Report on

Renault Duster: Dusting away competition or facing a dust storm?

Submitted To

Prof. Dr. Sheikh Mohammed Rafiul Huque.

Office Room No: NAC 985
Course: BUS 620.
Section: 6
Semester: Spring 2020
Submission Date-09.04.2020

Submitted By

Tuli Das (ID: 2016210660)

Trisha Rani Kar (ID: 2016211660)

Mohiuddin Mohammad Zawad (ID: 1925244660)

Mohammad Ahnaf Shahriar (ID: 1915286660)

 ACKNOWLEDGEMENT

April 9, 2020

Dr. Sheikh Mohammed RafiulHuque

Department of Marketing

North South University

Subject: Submission of Case Report

Dear Sir,

It is a great pleasure to submit our case report on “Renault Duster: dusting away competition or
facing a dust storm” as stated by your instructions. We have tried our best to make this report as
comprehensive and informative as possible despite the current pandemic situation.

We believe the observation, learning and experience that we acquired through this case analysis
will definitely help us in future. For any additional clarification about the report please summon
us, we will be gladly available to clarify the details.

Thank you again for your sound co-operation. 

Sincerely yours,

Tuli Das (ID: 2016210660)

Trisha Rani Kar (ID: 2016211660)

Mohiuddin Mohammad Zawad (ID: 1925244660)

Mohammad AhnafShahriar (ID: 1915286660)

 Table of Content

Topics Page Number

Abstract 1
Introduction 2
History of Renault 2
Strengths 6
Weakness 7
Opportunities 7
Threats 8
Dissolution of Mahindra Renault Joint Venture 8
Faced a Dust Storm 9
Circumstances faced by Management 10
Possible Suggestions for Duster 11
 Page 1

ABSTRACT

Renault is a French multinational vehicle manufacturing company. It is indeed a successful

company. Renault also entered the Indian market. As a big company, Renault also faced some
ups and downs in India which we are going to address and recommend some better ideas to
overcome those obstacles.
 Page 2

Introduction-
Renault was established in 1899 as a French Multinational vehicle manufacturer producing a
range of cars and vans. The company manufactured trucks, tractors, tanks, buses and auto rail
vehicles in its early years. According to the organization international des contstructeurs
d’Automobiles, in 2016 Renault was the ninth biggest automaker in the world by production
volume. By 2017, the Renault Nissan-Mitsubishi Alliance had become the world’s biggest seller
of light vehicles. The subsidiaries of Renault are Automobile Dacia, Alpine, AvtoVAz, and
Renault Samsung Motors.

Pic- Louis Renault with his first car.

History of Renault-
The Renault Corporation was founded in 1899 as Société Renault Frères by Louis Renault and
his brothers Marcel and Fernand. Louis was a bright, aspiring young engineer who had already
designed and built several prototypes before teaming up with his brothers, who had honed their
business skills working for their father's textile firm. While Louis handled design and production,
Marcel and Fernand managed the business. The French Government nationalized Renault in
1945. It was eventually decided that the company's state-owned status was a detriment. By 1994,
plans to sell shares to public investors were officially announced. The company was privatized in
1996. This new freedom allowed the company to venture once aga in into markets in Eastern
Europe and South America, including a new factory in Brazil and upgrades for its infrastructure
in Argentina and Turkey. In December 1996, General Motors Europe and Renault began to
collaborate in the development of LCVs, starting with the second generation Traffic.

Renault in India-
Renault entered into Indian market in October 2005 through 51:49 joint ventures with Mahindra
and Mahindra Limited and was named Mahindra Renault Limited. In April 2007, Mahindra
Renault Launched Logan- an entry sedan with prices starting from INR 428000 and INR 547000.
The Logan was launched to Cater to the Indian mid-sized car market. The Logan was a great
 Page 3

success in the European market and had sold almost 450000 units from 2004 to 2007. The
biggest competitors of Renault were Ford EcoSport and Chevrolet Enjoy. Also there was
Hyundai, Toyota and Suzuki.

Renault Duster in India-

The Dacia Duster was officially revealed on 8 December 2009 and made available in Europe
from 18 March 2010 and was a compact SUVs developed by Dacia. Given the price and novel
attractive design it became one of the most affordable compact SUVs in the global market. After
its initial success in Europe and South America, it entered the Indian market on 4th July 2012
under the brand Renault. The initial price range was INR Rs.8.35 lakh to 9 lakh.

Pic- Renault Duster 2012.

Strengths-
• Price Range starts from Rs.8.35 Lakh and Getting a Compact SUV in Sedan price: The
time when Renault initially launch Duster which was a compact SUV, people were
getting craze because of the price as its price was equal to Sedan car.
• Cost is low for localized parts: 50% raw materials are localized and the price of the
localized was comparatively that plays as a very strong strength for them.
• Well-known Brand image: the most important strength was their Brand Image as Renault
came to car industry more than 100 years ago; they build a strong brand image in the
industry. Also duster did a very successful business in European countries.
• Customization for Indian culture and Indian Environment: Before coming into Indian
market they did a very close observation on Indian culture and tradition. Then, they
design their product by meeting those requirements on mind. That grave customer
attraction.
• Focus on innovation: Renault is a very renowned brand, not to mention they always
brings innovative products.
 Page 4

Weaknesses-
• Weak operational performance: Their main weakness was their improper management
in operational activities, for example- there were less number of service centers all over
India except southern part, and as a result people were not getting proper service.
• Lower numbers of dealers in India: They didn’t hold many dealers all over India to
reach out their customers widely.
• Avoid mass advertising campaign: Another major weakness was, they did not do any
mass media advertisement such as: billboard, newspapers, magazines etc. that’s why they
didn’t able to grab the customers who didn’t follow online advertisement.
• Focused more on buzz marketing and social media marketing: They only follow buzz
media advertisement such as: online video showing etc. that’s hits only online followers
customers. Whereas the competitors did both online and offline advertisement.
• Over dependency on Duster: There 90% revenue were generating from sales of Duster
that deduce that they were over dependence on Duster.
• Poor financial planning: poor financial planning was another weakness as they did not
able to allocate their budget such as: they allocate very little for promotional activities
which is very crucial for every business. They need to redeem about their financial
budget.

Opportunities-
• Improve in infrastructure spending: Renault needs to improve the infrastructure
spending to grave market for example; Ford EcoSport a very strong competitors have
their sitting capacity for 8 persons where duster have only for 5.
• Increasing demand of SUV cars:There is huge craze among customer for SUV cars if
they focus on SUV properly that might bring huge success for them.
• Extend distributions and service all over India: As they don’t have much Service
centers and dealers all over India, so to increase the access to customer they need to
extend distributers and service centers.
• Focus more on mass media advertising: Renault competitors doing much for their
promotional activities, so to snatch the opportunity from them, Renault need to focus
more on mass media advertisement.
• More variation in the product line: Renault needs to more diversification on their
products as people are always attracted on something new and difference.

Threats-
• Growing competitors: There are huge growing competitors more Renault such as Ford
Eco sport, Chevrolet etc. and they both doing excellent business in Car industry of India.
• Changes in raw material price: Prices of raw materials are not stable. It’s may have ups
and downs always that impact on the prices of Cars.
 Page 5

• Fluctuations in fuel price: Fuel prices fluctuate a lot that may bring the down of demand
of cars among customers.
• Economic changes such as recession: Economical changes have a huge impact on every
business such as: when Renault first came to Indian market in 2007 by launching
‘’Logan’’, there was a recession in 2008 that completely shattered their business.
• Innovation by renowned automobile company: Auto mobile companies continuously
bringing newer innovation that brings more threats and challenges for Renault.

Dissolution of Mahindra Renault Joint Venture –

In October 2005, Renault entered into the Indian market through a joint venture named
Mahindra Renault Limited. There were 51:49 joint ventures with Mahindra & Mahindra
Limited. In April 2007, Mahindra Renault launched Logan- a sedan type car. The Logan was
a great success in the European market and had sold almost 450,000 units worldwide from
2004 to 2007. So Renault decided to introduce Logan and thought that Logan will also be
successful in Indian market. But the sales of the Logan not satisfactory as introduced in the
Indian market and the failure of the Logan mainly led to the dissolution of the joint venture
between Mahindra and Renault in February 2010.Why Logan Failed in India-

Pic- Mahindra Renault Logan 2007.

• Mahindra Renault Logan was launched for the Indian mid-sized car market. The sedan
came in the Indian market with modern features and stripped of costly design features.
But if compare to other competitors Sedan car Logan performance was poor and it was
also look like a Tourist Taxi in the Indian road. Also the design was backdated as other
sedan in the Indian market and Indian road.
• When Logan introduced in the Indian market prices starting from Rs. 4.28 Lakh for petrol
variant and Rs. 5.47 Lakh for diesel variant. The starting price was higher than other
competitors in the market. Logan pricing was improper because it was not exactly a low-
cost entry mid-sized car for Indian market. Logan price was higher than other sedan cars
because when manufacturing in India Mahindra Renault used only 50 percent local
 Page 6

sourcing and engines were imported from France. Another reason for higher price is the
higher excise duty faced by Logan.
• Another reason for Logan failure is that there was a Lack of company-owned network of
dealers and service centers for Mahindra Renault Logan and this caused Poor localization
for Logan. Logan was never aggressively promoted to introduce in the Indian market and
this was an Ineffective branding strategy.

Faced a Dust Storm-

Renault Duster the most affordable compact SUVs in the global market. After its initial success
in Europe and South America, Renault introduced Duster in the Indian market on 4 July 2012
under the brand Renault. After the introduction in the Indian market Duster became the biggest-
selling compact SUV in the market. But in 2013 sales of the Renault Duster declined because-

Pic- Renault Duster 2012.

• When introduced in the Indian market Duster was only in 2013 two competitors Ford
EcoSport and Chevrolet Enjoy entered into the Indian Market. Duster had smaller size
and Poor image compare to other competitors. From the Table we can see that Duster
length was 4.315 meters but had only five passengers sitting capacity compare to seven or
eight of competitors.

Compact SUV Length Seating Price

(meters) Capacity
Ford EcoSport 3.999 5 seaters Rs.6.75 Lakh - Rs.7.7 Lakh
Chevrolet Enjoy 4.305 8seaters Rs.7.41 Lakh - Rs.7.51 Lakh
Mahindra XUV300 3.995 7 seaters Rs 7.90 lakh - Rs 10.25 lakh
Renault Duster 4.315 5 seaters Rs.8.35 Lakh - Rs.9.12 Lakh
 Page 7

Pic- Ford EcoSport 2013 and Chevrolet Enjoy 2013.

• Duster price was higher than other competitors because in 2013 union budget increased
excise duty on petrol variants of the SUVs. From the table we can see that Renault Duster
price was Rs.8.35 Lakh which was higher than other competitors.

• Renault Duster had limited market penetration because Renault had fewer numbers of
dealers only in Major City areas. Had limited service centers and market coverage.
Renault avoided mass advertising campaign and focused more on online
communications. Renault used Buzz marketing and social media marketing to promote
the brand. And for this reasons lost the Non-tech-savvy consumers.

Circumstances faced by Management-

Event Situation Decision

1. Renault entered Indian
market with partnership
with Mahindra Ltd in 2005.
Renault introduced a Sedan
called Logan in 2007.
Failure of sales of Logan Management wisely decided
due to outdated to exit from joint venture in
performance and high 2010. Renault reentered
price. Indian market on its own.

2. Renault launched a Sport Duster found immediate Management decided to

Utility Vehicle (SUV) success by recording the carry on the business due to
known as Duster in July, highest ever sales in March the attained success.
2012. Duster featured 2013.
modern frame, smart tech,
quality interior and high
fuel efficiency.
 Page 8

3. But Duster alone Huge decline of sales in Management needed to

contributed to 80% of total July, 2013. Thus Duster rethink because it was a lot
sales of Renault. Over- was found behind Ford to worry about.
dependence of Renault on EcoSport and Chevrolet
Duster was exposed Enjoy in terms of sales.
because other brands of
Renault were hardly
contributing to sales of
Renault.

Possible Suggestions for Duster-

• To focus on one or two feature(s) and make it best in the space:Duster can focus
more on one or two features. For example, Duster can focus on either interior or
exterior and either on handling or speed. Duster has to make sure their focused
feature is better than its competitor. Then the people who cherish the feature focused
by Duster, will become customers of Duster.

• Offline Marketing: Now Duster has to make sure that they explain their focused
feature to the customers. Then customers will be able to understand the feature where
Duster is specialized. For this, Duster needs offline marketing. We know Duster
performs online marketing but it is imperative that also performs mass offline
marketing through generating buzz, publishing ads, using promotional products,
giving business cards, offering trade shows and lunch etc.

• Offering discounts:In order to ensure that Duster is affordable to customers, Duster

cannot help offering discounts at regular intervals.

• Improvement of other brands of Renault:Duster alone contributed to four-fifth of

total sales of Renault. It indicates that other brands of Renault were not performing.
Other brands of Renault need to make some sort of contribution in order to alleviate
the high pressure on Duster.

The End.