Renault plans to more than double shipments of parts from India to cut costs and boost links with suppliers in the country.
The chief operating officer of the company’s Indian unit, Sudhir Rao, said the automaker would purchase EUR250m (US$320m) of Indian components for use overseas in 2013, compared with EUR75m this year and EUR10m in 2009.
Rao told Bloomberg News that Indian-sourced parts cost as much as 15% lower than elsewhere in the world. Renault is also preparing to build cars in the country after scrapping a venture with Mahindra & Mahindra because of disappointing sales sales of the Logan they assembled together.
Renault will now introduce the Fluence sedan by the middle of next year, followed by the Koleos and three other models by the end of 2013.
The company plans to sell 60,000 vehicles a year in India by 2013, and, with Alliance partner Nissan, is building a factory in Chennai and developing its own dealer network.
Reo said Renault intends to have 30 showrooms, predominately in the nation’s seven largest cities, by the beginning of 2012. It then plans to add 30 more each year.
He added: “We have no illusion about what it takes in this market. The established players are very strong.”
Renault will ship the Indian-made parts to its factories in countries including Romania, Turkey and South Africa, Rao said. Nissan plans to buy US$40m of parts from India in 2012.
Nationwide parts exports have grown 10-fold in the past decade to an estimated US$3.8bn in the year ended March 2009, according to the Automotive Component Manufacturers Association of India.