Localisation is the key to success in India: Renault-Nissan chief Carlos Ghosn
Localisation is the key to success in India, says Carlos Ghosn, group CEO of Renault-Nissan Alliance. In an interview with ET, Ghosn, who was in Chennai for the unveiling of the 800cc global small car Renault Kwid, said he admires frugal engineering in India. Edited excerpts:
Can Renault Kwid travel abroad?
Our most important priority is India. This car is developed for India, as 25% of the car market in India is in this segment.
India is a great test in terms of competitiveness. If we can get a substantial market share in this segment for this car, then we know that this car will be competitive in many other markets like Brazil, Argentina, Africa and the Middle East and other emerging markets in Europe. But we have to be humble. We don't know what the customer demand will be in the next five or 10 years. We can (only) forecast with some certainty for the next three - four years.
You were the first European CEO to talk about Indian engineering? Now you have a car built for India. What has changed since your Groupe Renault came here?
There is a difference between watching a soccer game and playing it. It's not the same. We are on the ground and today we are in the game. We are doing it ourselves. We are marrying Indian skills with French and Japanese skills. And nobody has done this before. When we get people to work together, we have the experience of global markets married with local creativity. I'm a big admirer of engineering in India because Indians have a particular skill and gift in frugal engineering.
And it (frugal engineering) is not a buzzword anymore. We've done it. We have a technical centre here; we have hired engineers and we have made a car. It is no longer a philosophical question. We have put our money behind our beliefs. We made investments and we made the platform and we made the car.
If this car is a success, it will be the best tribute to how much Indian engineering can support global engineering into doing things which were considered impossible in the beginning. When we talked about this car and this platform some five-six years ago, our engineers in Tokyo and France said it is impossible. It cannot be made. The result is here.
We needed the fusion. The experience and knowledge of different markets coupled with creativity of Indian engineering. This is secret behind the group.
Your comments on Renault's journey in India so far?
I said from the beginning that India is a new market. It is a market with a strong identity. You don't read your way; you can't understand Indian market by reading a book or an essay; you have to learn by doing it and that is what we have done. Learning by doing means that from time to time you make a trial, you have some failures, you have some successes and you come to a conclusion, then you restart.
I would say that all the partnerships we had and all the partnerships we have been extremely important for us to learn the Indian market. Learn how to deal with Indian partners, learn how to understand the Indian consumers and how to do business in India.
And in a certain way, behind the creation of the Kwid, there is a lot of our past experience and our past failures. We learnt from this and it led us today to something which I call a success, which is creating a platform in India with very promising features for the alliances. And also bringing a car, from everything that we see today, is going to be extremely competitive in a segment that was considered as belonging to two car makers with two products.
But the Kwid is a result of all these years trying and trying again, adjusting and learning.
Why is Renault Nissan focusing only on entry-level customers, when the lucrative segment is the Maruti Suzuki Swift category?
We are the fourth largest automotive group in the world, so in terms of products and technology, we have everything, everything that you can imagine. Small car to the large car, the crossover to the SUV, the only thing that we need is strong localisation.
Because it is not sufficient to bring a good car from outside and try it, even though it may work from time to time—the Duster, for example, was developed outside of India and was a big success in India. If you want sustainable success, you need to localise in India. And that is what we are doing with the A Platform—we are localising in India. And 97% localisation rate for Kwid—that is what we need to do.
We have a lot of products, lot of technologies; what we need to do is to make sure we localise that in India. We localise them in a way that is extremely competitive.
And we offer them the taste of the Indian consumers. And this is a learning experience, again, not because the car is successful in China, Russia or Europe. IF it is going to be successful in India, you have to learn your way for the Indian consumers.
Your view on future partnerships in India? There are some challenges you are facing with the Ashok Leyland venture. Has it gone the way the company expected?
Partnerships are partnerships, when you make a partnership, you see there is a win-win way together and you try it. From time to time it is successful, from time to time, it is not. We are all business people, we are very pragmatic, and we are geared to collaborate for the sake of results. From time to time you have some good results, from time to time, you have some bad results, at the end of the day, what is important in the partnership is that if both the partners stay together or they don't stay together, they get much better after they learn something from their partner. I can say that even from our failed partnership, we learnt a lot.
Are you committed to the partnership with Ashok Leyland?
I am committed to any partnership that is on a win-win basis.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.