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Strategic Brand Management Assignment


Submitted to:

Dr. G. Muruganantham

Submitted By:
Aswin P


Bharath P Rajeev



Renaults made in India global car, the Kwid, created quite a buzz when it was launched.
It was because though Renault announced it was entering the compact car segment, this car was
quite different. The Indian customers had never seen a car with this kind of ground clearance in
mini car segment. Renault definitely have set themselves apart by the way this car looks in its
SUV kind of stance. But it is not just the looks that will make it work over here because Renault
have some stiff competitions with the likes of Hyundai Eon and Alto K10, which has been the
segment best seller. Alto have been the unchallenged market leader for the previous twelve years
in the mini car segment.
Renault Kwid has been quite successful since it was unveiled in May, 2015. It gnawed
away almost 8 percent of the market share in the segment of the entry level car market
from Hyundai Motor, and Maruti Suzuki. The French manufacturer Renault is gearing up to
launch a product attack targeting the major segment leaders. India has become the fourth largest
auto market for the manufacturer surpassing Russia and the company became one of the top give
car makers in the country and the leading European car manufacturer as well.
In fact, the Kwid has garnered 1.65 lakh bookings from domestic and export markets.
Now the hatchback has crossed 10000 sales mark in the month of August 2016. With a total sales
of 10719 units, the Kwid has grabbed the 6 th position in the list of 10 bestselling cars of the
month. Thanks to its aggressive pricing, the Renault Kwid has been receiving overwhelming
response across the nation. Besides pricing, what further worked in favour of the vehicle is its
contemporary styling and the best-in-class fuel efficiency.
"I think if you really want to be successful in India, you need to make the platform in
India. Obviously, you can bring a car from outside and do a lot of things, but if you want to be
successful in India, it has to have its genes here, which means the platform will have to be built
in India from the beginning," Carlos Ghosn CEO of Renault Nissan said. Renault Nissan came to
this realization only after the failure of Nissan sub brand Datsun Go. The Datsun Go, the brand's
first product, started its journey in India and was priced attractively between Rs 3.1-4.5 lakh but
was crippled by such bland styling and low equipment levels - it did not have airbags even as an
option - that consumers gave it a miss. The message: people want an affordable car but not a
cheap one.
One man who is credited for much of Kwids success apart from Carlos Ghosn is Gerard
Detourbet, managing director of Renault-Nissan Alliances A-segment Development Unit. He is
even called the Father of Kwid. He said, "It was clear to me from the start what sort of a car
would click in India. A car is not a utility here. It is an aspiration. Like a statement to the society
that I am doing well in life now. So while price is the big factor, the car should not look cheap.
Also there is this huge fixation for a high-bodied SUV-looking vehicle. It's not only in India, but

Brazil, Indonesia, Australia, Europe, US, China... everywhere consumers want these small,
compact SUVs. So we thought, let's give it a look of an SUV. An edgy upright stance".
The company is preparing to launch many models or variants in the next three years
under the Rs 8 lakh segment that makes up over 70 percent of the countrys passenger vehicle
market. Hyundai and Maruti are the leading auto makers in India and others such as Tata Motors,
Ford, and Honda compete with them.
The black chunky grill, black cladding skirting at the bottom of the car and nicely
detailed head lamps and tail lamps are sure to draw anyone to look at it. What really sets Kwid
apart is the 180mm ground clearance that makes it look different, it stands tall. Interior of the car
is nice and rather spacious for its segment. The instrument cluster is digital and it features a
touch screen infotainment panel which is uncommon in the mini car segment. It also has a 300
liter boot space which is also quite big compared to its competition. All these are segments first
and combine to give the feel of a slightly bigger sized car for the entry level customer. Also a
very fuel efficient car, Kwid with a mileage of 25.17 kmpl is good value proposition for an
average Indian customer who is sensitive about fuel economy.
Renaults new hatchback based on the CMF-A platform, has 98 percent of localization,
which is the highest we have seen on any other European car. Renault is the first European car
brand to get such has localization for a product and at the same time even make a stylish, featureloaded product that will make first-time car buyers to shift from the tried and tested Alto to the
new Kwid.
A large part of the credit for the Kwids success goes to sourcing of local components.
This allowed Renault to launch the car at Rs 2.56 lakh in September 2015 and to promise lower
maintenance and higher mileage than competing brands. The small car is a much closed
segment here. You cannot superimpose things from outside. That does not work in this country,
said Renault Indias chief executive officer and managing director Sumit Sawhney.
Over 400 suppliers were identified to work on the Kwid and told to deliver components
at competitive prices, said Sawhney. You have to commit certain volumes to suppliers to get a
competitive price. From day one, I wanted to sell more than 100,000 units a year. Less than that
is not a success. Gurgaon-based Paracoat Products, which produces noise, vibration and heatreducing components, is one of the suppliers. We introduced low-weight material. We localized
and bought materials at a competitive rate. It was all cost-driven, said Navin Banka, chief
executive officer of Paracoat. We tried to optimize from the design stage. The components were
not over engineered nor below specifications, he added. Banka said working with Renault on
the Kwid was different as suppliers were involved from the concept stage. Such a thing did not
happen before. We had the liberty to work with the engineering team. Targets were tough but we
were able to achieve them. Renaults engineering team was supportive and receptive. Carmakers

normally do not take a feedback as drawings are available from their headquarters and suppliers
are told to build according to design, he said.
Sawhney said the Kwid did not use a single fastener. A small car usually requires 18-20
kg of fasteners. Renaults advance wielding did away with these to reduce the cars weight by
five to six kilograms. This car had to be efficient and dynamic without compromising on
safety, he said. The wheels in the Kwid have only three nuts. You dont need four nuts if you
use the right materials and technology, said Sawhney. No other car in India uses three nuts in its
wheels. Pradeep Tewari, chief executive officer of the lighting division at Uno Minda, which
supplied the head and tail lights for the Kwid, said, The challenge is to scale the degree of local
design and engineering. Renault gave us freedom to come up with options that helped to manage
cost while meeting specifications. Our designs were accepted. This was the first lighting project
of Uno Minda with Renault. Some manufacturers insist on a global technology partner before
approving a local supplier. Had Renault insisted on that, the cost would have been higher, said
Tewari. Renault communicated with its suppliers regularly and the top management was always
involved. The French car maker also insisted on involvement of the top management from the
suppliers side.
Due to massive demand, the waiting period of the hatchback had gone up to 10 month in
certain tier-1 cities, and the French automaker had to increase the vehicles production by 50%
(i.e. 8,000 10,000 units) per month. Now, the waiting period has been reduced to 4 6 months
in certain cities. In order to bridge demand and supply gap, the carmaker has commenced 3rd
shift operations at its Chennai production plant from April 1, 2016. With the addition of third
shift, the company is producing 1,600 units per day, and the Kwid is the major benefit recipient.
This takes the total production of Kwid to 10,000 per month. Renault is offering a warranty
period of 2 years/ 50,000kms (whichever comes first) with the Kwid that can be extended up to 4
years or 80,000kms. A complementary road side assistance for 2 years is also offered by the
French carmaker. With 98% of localization level, this entry-level hatchback is claimed to offer
the best-in-class maintenance part costs and low cost of ownership.
Renault was also able to rope in Ranbir Kapoor as the brand ambassador for Kwid.
According to Sawhney We are a 117-year brand globally. We are a very young brand in the
country. Renault is a brand which is very vibrant and forward looking. We are looking forward to
connecting with people in India and bringing Ranbir as a brand ambassador is an ideal
partnership. Hes a perfect fit. It was a right marriage of personalities. A brand ambassador that is
a fit with brand values can really help a brand in India to communicate and converse with
customers. Its not limited only to major cities, but across the country. Its a very useful
association in the long term perspective.
Sumit Sawhney also stated that a lot of exciting offerings are in the pipeline. He added
that they will work on the segments that they are not present. They will try to bring in innovation

to a great extent to make them the segments game changer to redefine it or carve a sub segment
out of it. Renault already had meaningful sales in the country with the Duster SUV and the Kwid
has added to this success. The small car lured more over one lakh bookings ever since it
launched six months back.
Besides Kwids variant with a 1 liter engine to take over Wagon R and Alto K10 from
Maruti, Renault is prepping to work on CMF-A+, an evolution of the CMF-A platform. This will
accommodate a wider body and highly powerful engines. Renaults Kwid carries the credit for
being the first car to be made on the CMF-A platform that was jointly developed with Nissan.
Although Kwid had been an overwhelming success in the Indian market, when it comes
to safety it is way behind international standards. Kwid provides almost no safety features except
the optional driver airbag on top-end variant. United Kingdom-based vehicle testing agency
Global NCAP in May 2016 awarded zero star safety rating for the Renault Kwid, Maruti Suzuki
Celerio, Maruti Suzuki Eeco, Mahindra Scorpio and Hyundai Eon following a crash test. Another
con for this car is that it generates least torque in its class.
Renault should keep in mind that it gained 2.4 percent market share in the 2013-14 fiscal
but plunged to 1.6 percent in the following year. Now, Kwid has taken the market share of the
company to 2.5 percent in the 2015-16 fiscal, and the company is planning to double this to 5
percent this fiscal. But, it should not lose its fame over time and face a drop in the market share.

What are the major success factors of Renault Kwid?

What market segmentation strategy can be followed for Renault Kwid? Explain
How has the profile and mindset of the Indian car buyer changed since the last few years?
What is the differentiation strategy of Renault Kwid in mini-car segment?