On the eve of the Delhi Auto Expo at the beginning of this month, Sumit Sawhney took over as president and CEO of Renault‘s operations in India, becoming the first local to head the company in his home country. Roger Stansfield interviewed him for just-auto.
Sumit Sawhney replaced Marc Nassif, the architect of the dissolution of the previous partnership agreement between Renault and Mahindra. In little more than thirty months since going it alone, Renault has become the top-selling European brand in India by restructuring its management, manufacturing, product line-up and approach to the market.
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Sawhney is now charged with overseeing Renault’s plans to double its market share from last year’s 2.6% to 5% by the end of the decade. By then, the Indian market is expected to have more than trebled from 2.4m to as much as 9m, making it the third-largest in the world after China and the US.
While the Indian market is currently in decline – sales were down 7.5% last year – Renault is on the up, having posted an 83.1% improvement on 2012. Renault now offers five locally made, modern, attractive cars in India – the Fluence and Scala saloons, the Duster and Koleos SUVs and a small hatchback based on the Nissan Micra and sold as the Pulse – and will introduce a sixth in 2015.
From a base of just 1,500 sales in 2011 it has grown to 64,000 last year.
His placement is evidence of the increasing internationalisation of Renault – sales outside Europe now exceed those within it – and a statement of intent towards the Indian market. He also brings a local’s insight into the potential and problems posed by India, which has the third-largest and fastest-growing middle class in the world; a population of 1.2 billion, half of whom are aged under 25; and a demographic in which seven out of ten people are still rurally based.
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By GlobalDataIt is also full of paradoxes. “There are 29 states, 30 languages and 2,000 dialects,” he says. “When Indians buy something they talk about it being an investment rather than a cost. Indians demand the latest, but they are still rooted in tradition. Family and respect for elders is still very important.”
Under Nassif, Renault deliberately took a “top down” approach to the Indian market – the company’s current cheapest offering sells for the equivalent of EUR5,000 while the critical mass in the market is in the EUR3,500 price band. But that will change with the arrival of the first model based on the Alliance’s new cost-saving, parts-sharing Common Module Family (CMF-A) architecture.
This will be an A-segment model built to the Alliance’s “frugal engineering” philosophy for developing markets. It will also be the first new Renault for India under the stewardship of Sawhney.
“The brand represents access to premiumness,” Sawhney says. “We will be emphasising our technologies and also our degree of localisation – for the Duster we made thirty changes for the Indian market. Once we get the new mini-car we will cover more than 75% of the segments in the Indian market, and we will continue exploring other segments. Given the success of the Duster, another SUV would be very interesting for us.”
Nassif had been in charge in India for eight years, so he has seen the bad times as well as the good. “In 2009 we were in turmoil. We had to examine how we were going to revive India. In 2010 we came up with a plan which involved the end of the relationship with Mahindra,” he said.
“We handed Logan over to Mahindra and set about trying to achieve best-in-class quality and ride and handling while introducing good diesels. Our relationship with Mahindra had helped us to learn a lot about the market, customers, supply base and manufacturing here.”
Uniquely, Renault shares much of its Indian operations with Alliance partners Nissan and, since the start of February, Datsun. Elsewhere in the world the partners operate independently, but in India they have a US$1.3bn shared manufacturing and powertrain facility near Chennai, inaugurated in 2010, and a joint technical centre nearby, opened in 2008.
Renault also has design centres in Mumbai and Chennai, sales offices in Chennai and Delhi and logistics hubs in Pune and Chennai. It has expanded its sales outlets from just 14 in mid-2011 to 125 at the end of last year, with a target of 175 sooner rather than later.
The Chennai plant’s capacity was recently increased from 400,000 a year to 480,000, and though output is predicted to be around 300,000 in 2014, the re-introduction of Datsun and the planned increase in the number of Renault models, allied to the success of the Duster – which has become the country’s top-selling SUV in just 18 months – will mean that the slack will be taken up in the coming years.
Sumit Sawhney
Sumit is responsible for managing the entire operations for Renault in India and reports to Mr Gilles Normand- Chairman, Asia Pacific Region for Renault.
Sumit joined Renault in India as Executive Director in September 2012 from General Motors. With strong experience of 20 years in the Indian automotive industry, Sumit has spent a significant part of his tenure in augmenting sales, marketing, after-sales business and network development for the company. He was also part of a major transition at the US car company, which saw sales surge in India.
Sumit has been instrumental in establishing the Renault brand in India and setting the company on a growth trajectory. In his tenure, Renault Duster has become one of the top selling SUV in the country. Sumit joined Renault when the automotive industry was going through a downturn and inspired, motivated the team to establish Renault brand among the top 10 automotive brands in India within three years of its operations.
