After burning his hands with The Failure of Logan, Carlos Ghosn is again Grappling with Issues related to his ultra low-cost Car Project with Bajaj Auto. While The Automotive veteran has been able to turn around The Fading Fortune of Renault-Nissan globally, his India Journey has been full of hurdles so far.
Even with his formidable reputation for being a turnaround artist and as the man who is seen to have lent a Midas touch to Renault & Nissan globally, India has proved to be a tough nut to crack for this veteran. Nissan also faced problems in its JV with Ashok Leyland in the past over plans for developing a small car. Dheeraj Hinduja, Chairman, Ashok Leyland confirmed in October 2010 that the JV talks with Nissan on the small-car project has been shelved. Currently, Nissan only has a JV with Ashok Leyland for LCVs.
But despite all the confusion over its respective JVs, Renault’s plans to establish its solo presence in India remains intact. The company will be launching Renault Fluence sedan and its Koleos crossover by mid-2011 in India and is currently in the process to expand its dealership network. There is little clarity on whether these cars will be manufactured in its plant in Chennai or will come as completely built-up units (CBUs). The company has said that it will launch five models in the next four years. Renault has a total capacity of four lakh units per annum at its plant at Oragadam, near Chennai, which it operates jointly with Nissan. Going forward, Renault is likely to bring products like Clio, Sandero and Twingo in the next few years. In fact, even if it finally decided not to partner with Bajaj, the auto major has plans to launch a small car in the Indian market that will establish its presence in the volume-pulling A2 segment. While the results of Ghosn’s solo ride in India are yet to be seen but going by the plan layout, it is the biggest opportunity for the company to create its space in the already crowded Indian automobile market.
Automobile majors such as Maruti Suzuki, Ford and others have successfully made in-roads in the Indian market by taking the JV route. Agrees Yezdi Nagporewalla, Head-Automotive, KPMG, “In the automotive market, joint ventures can be crafted as a successful medium for entering India.” But Ghosn has not been able to replicate a similar magic so far. The accolades and milestones that Renault-Nissan has accomplished till now, under the leadership of Ghosn, are truly impressive. But there is no evidence till date that Ghosn understands even one P of the marketing mix for the Indian consumer – from pricing to packaging to promotion to even placement. The Indian consumer, they say, is a vicarious infidel – where even the top end consumer would jump at a price discount than indulge in profligate luxury. Will Ghosn understand that? Does he want to?
But despite all the confusion over its respective JVs, Renault’s plans to establish its solo presence in India remains intact. The company will be launching Renault Fluence sedan and its Koleos crossover by mid-2011 in India and is currently in the process to expand its dealership network. There is little clarity on whether these cars will be manufactured in its plant in Chennai or will come as completely built-up units (CBUs). The company has said that it will launch five models in the next four years. Renault has a total capacity of four lakh units per annum at its plant at Oragadam, near Chennai, which it operates jointly with Nissan. Going forward, Renault is likely to bring products like Clio, Sandero and Twingo in the next few years. In fact, even if it finally decided not to partner with Bajaj, the auto major has plans to launch a small car in the Indian market that will establish its presence in the volume-pulling A2 segment. While the results of Ghosn’s solo ride in India are yet to be seen but going by the plan layout, it is the biggest opportunity for the company to create its space in the already crowded Indian automobile market.
Automobile majors such as Maruti Suzuki, Ford and others have successfully made in-roads in the Indian market by taking the JV route. Agrees Yezdi Nagporewalla, Head-Automotive, KPMG, “In the automotive market, joint ventures can be crafted as a successful medium for entering India.” But Ghosn has not been able to replicate a similar magic so far. The accolades and milestones that Renault-Nissan has accomplished till now, under the leadership of Ghosn, are truly impressive. But there is no evidence till date that Ghosn understands even one P of the marketing mix for the Indian consumer – from pricing to packaging to promotion to even placement. The Indian consumer, they say, is a vicarious infidel – where even the top end consumer would jump at a price discount than indulge in profligate luxury. Will Ghosn understand that? Does he want to?
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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IIPM: Indian Institute of Planning and Management
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age WomanIIPM's Management Consulting Arm-Planman Consulting
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
