Multinational Management

Assignment 2

” Renault: What changed their

fortune and Fostered their
turnaround in India ”

Name Abhilasha Mukherjee

Div_Rollno. B_4

PRN 20020441007

Subject Multinational Management

Submitted to Mr Rishi Kappal

 ” Renault: What changed their fortune and Fostered their turnaround in India”

Renault India Private Limited is a 100% subsidiary of Renault SA, France and currently offers four models in the Indian
market: the Duster SUV, the Triber compact MPV, the Kiger compact SUV and the Kwid economy car. Renault India is
also exporting the Duster to a growing number of right-hand drive markets.

When the French auto giant first entered India via a joint venture with Mahindra & Mahindra, it had high hopes for
its first product, the Logan midsize sedan launched in 2007. But the car with its old look and its high price did not
succeed. with Indian consumers. Such was the scale of the debacle that killed the company in 2010. The Renault brand
has been a big hit in India. Ironically, Logan's failure laid the groundwork for the success of Renault's Duster compact
sport utility vehicle (SUV).

After parting with Mahindra & Mahindra, Renault chose to go it alone. It has set up a 4,500 crore rupee factory in
Oragadam near Chennai with its global partner Nissan Motor Company. The installation meets the needs of Nissan
and Renault. But Logan's downfall continues to haunt the company. Some of the first products to roll out of the new
factory were positioned as “image pilots”. It launched the Fluence premium sedan in May 2011 and the Koleos
premium SUV in September of the same year. Both are assembled at the Oragadam factory from imported kits. Its
follow-up product was the Pulse, a compact car launched in January 2012. The Pulse is a hybrid version of Nissan's
Micra and also positions itself as a premium product. Renault is focusing on revitalizing its image in India and as a
result, the premium services that go with it are in limited number in a country that prioritizes value for money.

Renault was in desperate need of a “volume pilot” to support its operations. It defines a gap in the SUV segment.
There are SUVs priced at Rs 20 and more manufactured by global players and those priced between Rs 6 and Rs 10
manufactured by Indian companies. They saw it as an opportunity, Product Planning at Renault India. The company
launched the Duster at Rs 8 lakh to Rs 12 lakh in July 2012.

Duster has taken the Indian market by storm. It has boosted the compact SUV segment and captured 23% market
share in one year. The success of Duster is such that Renault must triple its production a few months after its launch,
going from 7 units / hour to 20 units / hour. Today, one in three cars produced at the Oragadam plant is a Duster.
That's not all. Duster now represents 86% of Renault India's production, 81% of its revenue and 100% of its exports.

How does a predominantly European car win the hearts of picky Indian customers?

The answer lies in what Renault India did within 24 months of deciding to bring Duster to India. The Duster is Renault's
first "real" product in India after the Logan. Logan's failure reminded us of the importance of understanding the
customer, buying the right product, and positioning Duster correctly at launch.

The company returns to the drawing board to get to know its Indian customers. He identified a focus group of around
200 people whose profiles matched potential Duster buyers. He then selected 30 families from this focus group in five
Indian cities for a two-month ethnographic study. During this stage, members of the product development team lived
with target customers to observe them, understand their lives and their needs. They also take the time for customers
to learn what they like and don't like about their vehicle.

Research reveals 41 amendments European Duster needs. Guerin said the exercise helped the company understand
what a car needs to be to meet the needs of an Indian customer. They understand that an important factor in buying
a car in India is the exterior design. People like an SUV with a solid look that stands out from the crowd, but at the
same time, they want it to behave like a sedan that's easy to drive and has good fuel economy.
There are other lessons as well. Research shows that Indian consumers prefer a solid chrome finish on their cars,
especially the exterior. They love the colorful pads all over the body. Inside, they preferred a two-tone interior and
wanted switches for the power windows on the doors rather than in the center console. As a large part of Indian cars
are equipped with a private driver, the rear seats require special treatment. Indians prefer recliners for more comfort.
Rear air conditioning is important, as are the armrests, portable chargers, and e-readers. Some storage spaces are also
welcome.

European Duster does not have these attributes. Renault made some modifications to the car to adapt it to Indian
conditions. These include beefing up the suspension to tackle India's rough roads and provide higher ground clearance.
He added more brackets to the car doors because they tend to be used roughly. The engine has been tuned to meet
the fuel quality in India and delivers high performance of at least 20 km per litre. The development of the engine was
carried out in Paris; the company shipped the diesel from India to be precisely tuned.

At the beginning of 2011, the company held a client clinic in New Delhi to validate its learning. He placed the prototype
of the European Duster, after the necessary changes, next to rival cars in the price range of Rs 7 lakh to Rs 12 lakh, and
sought their advice from a number of potential customers. and automotive experts. They must also sign a
confidentiality agreement with Renault. The feedback they received showed that they were on the right track. After
that, the company started making actual modifications to the car. The Renault Nissan India Business Center &
Technology team has defined a 3F strategy Rapid (adaptation to Indian needs must be done within 12 months),
Economical (with limited budget) and Great (without compromising on quality), the team then made changes to the
car. Three groups: the product development team, the Renault design studio in Mumbai and a group of engineers
started operations as a small company within Renault India. Nassif, India's CEO, was empowered to accelerate
decision-making.

They soon realized that to achieve their 3F goals, they needed to make local changes with a local team. It helped. They
make changes in 12 months, on a budget, and ultimately a product that people love. Such success would not have
been possible if the modifications were made in Paris. 4,444 Since then, Renault has launched the Renault Kwid small
car in September 2015 and has made a big impact in India. The increasing density of Kwis on our roads is proof of this.
Kwid completed its first year in the Indian market with record sales of 10,719 units in August and cumulative sales of
1,07,033 units through October. that his little car is simply exceptional.

Thanks to the huge success of Kwid, Renault is expected to exceed five percent market share in India this year; the
goal that the French car manufacturer has set itself to achieve in 2017. But that's not all. Renault has also set itself
ambitious long-term goals. It aims to enter the top three manufacturers by volume in India by 2023 and hopes that
product life cycles will become shorter. The company is looking to actively launch several variants of the Kwid, as well
as new products. In fact, the company plans to release a new variant of the Kwid every year.

Developing a promising product is only half the job of a dynamic automotive market like India. Implementing a perfect
marketing strategy is also very important. It meets three key requirements for a successful launch: right time, price,
and product. They had to think differently for Kwid to be successful, when they launched Kwid they were up against
the old players in the segment. The challenge is enormous. In addition to traditional marketing, they are also looking
to use digital as a powerful means of raising awareness. Interestingly, days before the launch, Renault showcased an
app as well as a virtual showroom for potential buyers to explore the car. The company has received over 21,600
bookings through the app alone and digital media is at the forefront of their campaign strategy. Its goal is to get 15%
of its leads from digital in the short term. Renault has also partnered with mobile payment platform Paytm to allow
customers to order a car online or pay for a reservation at dealerships with their Paytm wallet.

The influence of the Renault automobile is such that the country's largest carmaker, Maruti, is now examining what
has made it so successful. The Indian auto group's best-selling Alto is facing serious competition from a rival for the
first time.