Renault, holding less than a 2% share in India’s competitive auto market, is calling for regulatory discipline in the country as it prepares for new investments. The French automaker expressed concerns about unnecessary engineering costs resulting from New Delhi’s decision not to implement a proposal mandating six airbags in cars. In an interview, Venkatram Mamillapalle, Renault’s country head, outlined the company’s shift in approach to regulatory changes and emphasised the importance of aligning with government mandates.
India proposed mandating six airbags in all new cars sold after October 1, 2023, in 2022. However, months before the deadline, the proposal was not finalised, leaving Renault with incurred engineering costs as it had already invested in re-engineering its cars, and suppliers had prepared their capacities. Mamillapalle acknowledged this as a “sunk cost engineering-wise” and stated that Renault is now making six airbags an option for customers, with a commitment to await final regulations before implementation in the future.
“If the government lays down a path of regulatory aspects, they should follow,” Mamillapalle emphasised, underlining the significant financial investment required to comply with regulatory changes.
Renault’s concerns echo broader sentiments within the automotive industry regarding policy implementation in India. Mamillapalle’s statements highlight the industry’s unease with regulatory uncertainties, citing the potential impact on investments and operational strategies.
Renault’s stance comes in the context of a larger policy debate within India, as evidenced by transport minister Nitin Gadkari’s warning to automakers about higher taxes for diesel vehicles only to go back on his words later, leading to a temporary stock market rout. The industry seeks stability and consistency in government policies to facilitate long-term planning and investment.
Despite facing a slide in domestic sales last year, Renault remains committed to its growth plan in India. Mamillapalle outlined a strategy that prioritises profitability over market share, with upcoming launches of upgraded variants, including the small car Kwid, the seven-seater Triber, and SUV Kiger in 2024. These models will incorporate advanced technology and connected features to cater to the demands of entry-level car buyers.
Renault, in partnership with Nissan, plans to invest USD 600 million in India over the next three years, aiming to boost sales and introduce new models, including midsize SUVs and electric vehicles starting in 2025. The company envisions continued investment beyond 2027 as part of a global plan to allocate USD 3.2 billion in markets outside Europe, with a focus on Brazil, India, and Turkey.
Renault remains optimistic about its presence in the Indian market, emphasising the robustness of its strategies and commitment to stay. As the automaker navigates regulatory challenges and pursues its growth plans, the industry will be keenly watching for consistent and transparent policy frameworks from the Indian government to foster a conducive environment for investments and innovation.