Renault has just increased Indian production capacity and plans to export locally-made engines.

“Our second production line at Chennai commenced operation about 10 days ago and we could now produce 400,000 cars annually,” Marc Nassif, managing director, Renault India, told just-auto at a media event in New Delhi.

A second shift could be added if demand increases and the dealer network is being expanded.

“We had 11 dealers in 2011 but 43 by the end of March. We are targeting 100 dealers by the end of 2012,” said Nassif.

The company launched a diesel Fluence sedan with fuel efficient 1.5 dCi (K9K) engine made at its Indian plant. Renault sold 1m units of its top selling engine globally in 2011.

The new car targets the VW Jetta, Skoda Laura and Toyota Corolla locally. The company is eyeing the increasing size of the diesel car market in India and believes that a larger diesel range would bring additional volume.

Nassif said: “We are targeting sales of 30,000 units in calender year 2012.”

The diesel-petrol ratio was 80:20 in 2011. The company sold around 1,500 units last year having launched its first car mid-year.

“We have already crossed the 1,000 mark in the first three months and, on the strength of four models and another one in the offing, we hope to achieve the target.”

The company now sells the Fluence E4 D, diesel Fluence, Koleos SUV and Pulse small car and plans to launch the Duster shortly.

Its cars are manufactured in the Renault-Nissan alliance plant in Oragadam on the outskirts of Chennai.

“We will soon supply engines to Daimler’s upcoming model in Europe from our Chennai facility,” Nassif said.

But he declined to comment on the progress of the small car venture in alliance with Bajaj & Nissan.

“Our focus is on the localisation of the global portfolio but we are not saying that we are not interested in launching a low cost small car. We are still working on a low cost project in the alliance and the decision on it will be taken by the global management,” Nassif said.