French car major Renault India is gearing up to launch a sub Rs 4 lakh small car to compete with the likes of India's largest selling car Maruti Alto and Hyundai Eon in what would be the first such attempt at the entry level segment by a European car maker.
Developed on the Renault Nissan's experiment at creating a frugal platform--CMFA-- for cars in emerging markets, the small car codenamed XBA would be showcased for the first time by Renault Nissan Chairman Carlos Ghosn at the alliance's Chennai factory next month.
The car is expected to be launched in the run up to the festive season this year that starts in October. Together with its first MPV Lodgy that was launched on Thursday, Renault hopes to double its sales and increase its marketshare in India to 5% from the current 3% by the end of 2016.
"Lodgy is a breakthrough products for us just like the Duster in 2012 and we will follow it up with a small car priced less than Rs 4 lakh in the second quarter of this year," said Sumeet Sawhney, country CEO and MD, Renault India. "We should be able to hold on to the current volumes of the Duster and these two cars will give us the incremental numbers to achieve 5% marketshare in India by next year."
Ghosn has been a big admirer of the entry level segment in India that includes world's cheapest car Nano, and this is not the first attempt at cracking the segment by the alliance. Japan's Nissan Motor Corp relaunched its low cost Datsun brand in India last year and launched a small car Go and a seven seater version Go+. Both the cars however have not been able to meet expectations in the market.
The Alto has been India's largest selling car for over a decade. Its sales stood at 264,492 units in 2014-15 while Hyundai's entry level car Eon was the eighth largest selling car with sales of 78,334 units. Renault's overall sales that includes SUVs Duster and Koleos, small car Pulse and sedans Fluence and Scala was 42,955 units during the fiscal.
European carmakers have generally avoided that segment that is fiercely competitive on price. Europe's largest carmaker Volkswagen deliberated with its Up small car for India but shelved it later as it was deemed too compact and expensive to succeed in the market.