We will bring further innovations to Kwid: Sumit Sawhney

Sumit Sawhney, managing director of Renault India can't hide his enthusiasm the moment you start talking to him about Kwid, which he claims is country's biggest 'Made in India story' so far. In an interaction with Shahkar Abidi, he speaks at length about Kwid's performance, its failed crash tests results, among other topics.

Don't you think by primarily focusing too much on Kwid, Renault (India) may be losing its focus on other portfolios, which may give an impression that Renault is just a one-product company. Is there a well-thought strategy behind it?

A fact which I must tell you is that the mini car segment is very competitive, consisting around 25% of the total passenger cars sold in India. At the same time, one must not forget that most of the companies in the country which have got into it have not been very successful in it. It is very important to note that it was the launch of Duster that paved the way for Kwid to become an instant hit. Kwid's success continues even over a year after it was launched. The segment under which Duster falls is not more than 4-5% of overall car sales in India. As far as our other product Lodgy is concerned, it is into the second year of its launch. The car comes under MPV (multi-purpose vehicle) segment where the buying decisions are more rational as compared to in other segments where people buy more based on emotions. Even brands like Innova and Tavera, which fall under this category, did not do well in the first two-three years. MPV category forms around 6-7% of the total market.

You have ascribed 98% localisation as the main reason for the success of Kwid. Your competitors are also following the same policy to cut costs and bring better products. For how long do you think will Kwid able to sustain its growth due to it?

The 98% localisation indeed helped us to make a mark in the business and we continue to follow that. It is understandable that competition will try to beat us in it. But yes, innovation is the buzz word. We bought AMT, 1L and will bring further innovation to the car in order to remain ahead. It's not that only we may remain ahead. At times, competition will also get something right. But the point is that we are on our toes and want to remain ahead in the race by giving value for money to the customer. Also, most companies failed in this segment because they could not sustain the low price at which they launched their vehicle. But we have managed to do it. I was very clear that we don't want to get into the mini segment. But if want to succeed, then we need to have a very high level of localisation. On the other hand, even the best of manufacturers have not been able to cross more than 95% of localisation.

You talk about safety issues, but Kwid failed in one of the crash tests done by a Global NCAP. David Ward, Secretary General of Global NCAP had commented in May that it is very surprising that a manufacturer like Renault introduced the Kwid initially lacking essential safety features. He added that no manufacturer anywhere in the world should be developing new models that are so clearly sub-standard. Later in September, NCAP conducted another test and awarded one star to the standard model for adult protection. What would you say?

Talking about the crash test from global Global NCAP, I want to make one thing very clear. They have been doing these crash tests since past several years. We are in mini car segment and every car in that segment has failed the test. But it's only this year did they (Global NCAP) say that there is one global manufacturer which is really changing the benchmark and we got one star in it. We are not even waiting for government's deadline to comply with safety standards for cars. We are doing it now and have safety features ahead of compliance. Further, I want to bring to your notice that Global NCAP has been doing crash tests in India of cars which are around 8-9 years in the market and not new cars which have just launched. It is we who asked them to test Kwid and come out with results. As a company and brand, we want to be transparent and clear in all we do.

You recalled a significant number of Kwid cars few months back.

Recall? Which car? We had indeed made an announcement because we are very transparent and responsible company. This is not typically a recall but just a minor issue regarding a small clip in the engine. It was observed that some of the Kwids may stop sometime and start again. It was not a safety issue. Recalls are for a big safety issue. So, we went ahead and announced to the customers that either you come to the service centre whenever you have the time or we will come to your place to rectify it.

How is your dealership network expanding and what is the plan ahead?

Since most of our customers are coming from interiors of India, it makes more sense for us to escalate fast on that front. At the start of the year, we had around 205 dealers, which will reach to 270 by the end of this year. Further, by the next year, we hope to reach a figure of around 325 plus outlets.

How are the exports panning out?

Our exports are very small as we are concentrating on local market now. However, we have started exporting to Sri Lanka since June and are already number 2 player there. Then, we are also exporting to Nepal. We will also soon be starting exports to South Africa. Also, we will be setting up a localised business in Brazil.

The correspondent met Sawhney in Goa at company's invitation