Carlos Ghosn's tete-à-tete with Overdrive
The CEO and President of the Renault-Nissan alliance, Carlos Ghosn, discusses Renault's future plans for the Indian automobile market and also sheds some light about the Bajaj low cost car. Here are a few excerpts from the conversation between Sirish and Carlos Ghosn. Overdrive: Mr Ghosn how important is it for India to have a Formula 1 race? Mr Ghosn: Oh I think it is important because, you know, Formula 1 is a show. It's a show of technology, it's a show of cars and it's a show of personalities. Particularly I'm talking about the personalities of the pilots (drivers). And the fact that India has the show in India where you can see pilots (drivers), particularly the Indian pilots (drivers), you can see the technology presented by companies like Renault, you know, its is very good. I think the investments that have been done here is remarkable. I was very impressed with the quality of the infrastructure which has been built and I'm looking forward for a great race. Overdrive: Is Formula 1 going to help Renault sell more cars in India? Is it still a very good marketing platform? Mr Ghosn: It is a great marketing platform, because it gives awareness to the brands. The fact that, you know, we're going to have tens of millions of people looking at the Formula 1 race. They are going to see the names of the car manufacturers. They are going to realise that the technology which is allowing, for example, Red Bull to win or Red Bull to become the world champion has an engine which is made by Renault, That Renault is making this technology and this technology is very reliable. All of this, in a certain way support the image of the brand and support the sales offensive that Renault will be conducting in India. Overdrive: How are you going to leverage this association after the Grand Prix (Formula 1)? Will you get into local motor sport? Will you bring 'Renault Sport', the brand into India? Mr Ghosn: Well there is no doubt that at a certain point in time Renault Sport will be coming to India. At a certain point in time because, in fact, introducing it today does not make sense. We barely sold 1500 cars in India in 2011. So you need to reach a certain level of market share and a certain level of market penetration in order to bring these additional tools, I would say. But we don't look at India as a kind of short term prospect we look at a very long term prospect. So we are going to take our time in order to make a real contribution to the development of the Indian market. Overdrive: You talked about your market share in India. Is Renault India progressing according to the game plan? Are you happy with your sales, with your figures and also about Nissan? Mr Ghosn: Well I cannot say that I'm happy with the sales because we practically did not start but we announced four cars which all are going to be assembled in Chennai. And as you know Chennai is a plant which is common between Renault and Nissan. Nissan this year will be selling 42,000 cars which will give it 1.4 percent market share. But again in terms of progression it is good, in terms of absolute amount of market penetration we are still far from our potential. The target that I'm giving to the alliance, you know, on which Renault is going to contribute and Nissan is going to contribute is 10% market share in India. Why 10% because globally the alliance represents 10% market share so there is no reason that in India we have a market share that is below our global market share. Obviously this is based on products, this is based on quality of service, on distribution network and also on a very good performance at the level of the plants. Everything is in place, products have been selected, the plants are running and ramping up. So I think we are finished with the strategic planning etc, we are now in the execution mode. Overdrive: So 10% by when? Mr Ghosn: We didn't put a date yet. Why? Because, you know, we want to see the evolution on the first two years and then after this we will put a date. But I will say that 10% is a first step that this level of strategy should bring us. Overdrive: What is your biggest challenge in India? The one biggest challenge. Mr Ghosn: Well I think we need to have an offer in terms of affordable cars which is adapted to the Indian market that is the biggest challenge. Because, you know, everything which is not affordable car we have plenty of on offer. What we need is sophisticate our offer below the B segment car. We are going to be coming with more than one car at this level, but for the moment even the launch, for example, by Nissan of the Micra and the Sunny and Renault is doing well with the launch of the fluence and Koleos, but these are still relatively small numbers compared to the bulk of the market. The bulk of the market is going to have to be approached with other products and, you know, when we will be ready we are going to be announcing them. Overdrive: And finally with the Bajaj alliance what is happening? Mr Ghosn: Well, you know, we are still working with Bajaj. I am still waiting to see the car that they are going to show us because, as you know, in this collaboration we ask them to develop a car using the best of the frugal engineering in India and bring us 4 wheelers that would be able to be very competitive on the market and then after they show us what they have been working on we will decide how much of a contribution this car will make in our line up. Overdrive: The alliance is still on? Mr Ghosn: Yes sure, I mean, we are still co-operating and again, you know, alliance is based on how much mutually we are benefiting from each other. So the next step is evaluation of the car of Bajaj.
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