Renault will soon offer the Kwid -- an affordable new hatchback with luxurious features to the Indian market. The automaker aims to compete with the country’s top-selling car, the Alto, which is sold by Maruti Suzuki. The Kwid has an airbag option and has navigation functions. These are features not commonly found in the most popular small cars in India.
At the unveiling of the Kwid in Chennai, Renault-Nissan CEO Carlos Ghosn said that this car is expected to be “game changer” for Renault India. He said that India’s auto market is not easy and that the automaker is still learning its way. The Kwid looks like an SUV with its ground clearance that’s 180mm high and with a high seating position and short front and rear overhangs.
The Kwid measures 3.68 meters long and 1.58 meters wide, making it a bit bigger than the Renault Twingo. The car is built on Renault and Nissan's Common Modular Family A platform. With a starting price of 300,000 rupees ($4,700), the Kwid minicar is significantly cheaper than the Alto (which is priced from 246,163 rupees.
It’s likely that the Kwid will start selling this September. The automaker predicts that the Kwid will be a big factor in its growth in the country. Renault has set a target to increase its market share in India to 5% by the end of 2016 after having a share of only 1.7% in the 12 months ended March.
It hopes that its lowest-priced model, the Kwid, will help it achieve its goal. It can be recalled that Nissan had the same wish when it started offering the Go, the first car from its Datsun brand, last year in India. Its sales had been dismal.
The Society of Indian Automobile Manufacturers revealed that only 16,000 Go hatchbacks have been sold in India since it was launched. This is lower than Alto sales in one month. Amit Kaushik, principal analyst at IHS Automotive in New Delhi, explained that this segment is “very price sensitive.”
He said that Renault faces a huge challenge since it doesn’t have a strong network or a foothold in the rural areas, which is where most of this segment’s sales are seen.
Ghosn said that Renault is increasing its dealerships in India. By the end of 2016, it’s expected to nearly double its sales outlets from the existing 157 to a total of 280.
Maruti, which has been at the top of the market, boasts of having 1,500 outlets. Approximately 30% of its sales originate from rural India. What makes it so attractive is its tiny 0.8-liter engine that’s mated to a 5-speed manual gearbox, allowing the vehicle to be "extremely well positioned in terms of fuel consumption."
However, automakers in India are now working on adding more high-end attributes in their car to reach aspirational customers who are not considering cars only because they’re cheap.
Last Tuesday, Indian company Tata Motors unveiled a plan to sell an automatic version of its small Nano car. Known as the cheapest car in the world, the Nano has had poor sales.
The automatic version has a starting price of 269,000 rupees in New Delhi. It is now being targeted at consumers in urban areas rather than its initial target demographic of scooter riders who want to drive their own car.