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Home  » Business » Renault Kwid gives Maruti Alto a run for its money

Renault Kwid gives Maruti Alto a run for its money

By Ajay Modi
June 23, 2016 15:01 IST
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Kwid has been a phenomenal success for Renault and brought over 125,000 bookings since its launch in September last year and enjoys a waiting period of two to three months. 

Renault Kwid

Image: Almost half of Kwid’s buyers are two-wheeler owners. This also indicates the entry segment car market is expanding -- reinforced by the fact that Kwid’s volume is much more than the decline in Alto numbers.

The nine-month-old Kwid is giving Maruti Suzuki Alto, for years an undisputed leader in the entry-car segment, a run for its money.

Data show Alto sales have not grown for six of the seven months since October last year.

The Kwid was launched in the last week of September.

Alto brought in a fifth of Maruti’s domestic annual sales of 1.3 million vehicles last year. In each of the first five months of 2017, Alto's sales have dipped compared to last year.

And it was not small either.

Barring January 2016, when the decline was in a single digit (six per cent), all other months have seen a double-digit drop.

Maruti said a facelift was being launched in May.

Renault Kwid

Maruti Suzuki also claims there is no dent in the sales.

“The concern here is that of overall capacity. We are running to absolutely full capacity.

"We have to do some internal adjustments to meet the demand for models across the portfolio.

"That’s an interesting challenge to handle.

Our production teams are finding ways of balancing all the segments within the overall available capacity,” said a company spokesperson.

The Alto remains the largest-selling vehicle for Maruti, which commands a 48 per cent share in the domestic passenger vehicle market.

But it is facing an attack from two recent entrants: Renault Kwid and its alliance partner Nissan’s redi-Go, that was launched early this month under Datsun brand.

Renault Kwid

Both the vehicles were aggressively priced on the back of a 98 per cent localisation.

Kwid, known for its SUV styled exterior, is priced at Rs 262,000 (ex-showroom, Delhi), while redi-GO was launched at Rs 239,000.

Maruti’s Alto 800 is priced at Rs 249,000.

Kwid has been a phenomenal success for Renault and brought over 125,000 bookings since its launch in September last year and enjoys a waiting period of two to three months.

Almost half of Kwid’s buyers, the company said, were two-wheeler owners.

This also indicates the entry segment car market is expanding -- reinforced by the fact that Kwid’s volume is much more than the decline in Alto numbers.

“The entry segment has been nearly flat in last three to four years.

"New models have brought some momentum and vibrancy to the segment.

Renault Kwid

"The segment will expand and Maruti Suzuki with its reach stands to benefit from the sentiment,” the Maruti spokesperson said.

Renault India’s Chief Executive Officer and Managing Director Sumit Sawhney said in Kwid the customers have got a car with a good price, mileage and maintenance cost.

“This is a price-competitive segment.

"We would not have been successful without this level of localisation. We need to make sure that the growth is sustained,” he said.

Renault has introduced a third shift at its plant in Chennai early this year and will be looking to produce 10,000 Kwids a month from July. Kwid has changed the fortunes of Renault in the fast-growing Indian passenger vehicle market.

Renault Kwid

Its market share improved from 1.66 per cent in FY15 to 2.57 per cent in FY16. In April-May period, its share stood at 4.4 per cent.

Maruti is a little worried. The company said as a brand Alto has retained its position for 16 years in spite of offerings by several competitors to ‘challenge the brand’.

It said the company has been upgrading the brand from time to time to be relevant.

The company also claimed that it due to its vast network and presence it offers an unmatched post sales service care, availability of affordable spare parts and its models also enjoy a higher residual value.

“For any model, all these become clear only after a cycle of one to two years is completed,” the spokesperson said.

Photographs by Rajesh Karkera/rediff.com

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Ajay Modi in New Delhi
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