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Renault's logo seen on the boot of the new and advanced Triber car at a launch event in New Delhi, India, on January 9 2024. Picture: SAHIBA CHAWDHARY/REUTERS
Renault's logo seen on the boot of the new and advanced Triber car at a launch event in New Delhi, India, on January 9 2024. Picture: SAHIBA CHAWDHARY/REUTERS

New Delhi — Renault wants India to adhere to its regulatory road maps after the French carmaker incurred unnecessary engineering costs due to New Delhi’s decision not to implement a proposal mandating six airbags in cars, the company’s country head said.

Renault has less than a 2% share of India’s thriving car market and is planning more investments. But it has decided to change tack on how it prepares for regulatory changes New Delhi asks for, Venkatram Mamillapalle said in an interview.

India in 2022 proposed mandating six airbags in all new cars sold after October 1 2023, but months before the deadline it had not finalised the proposal, effectively putting that decision on hold. By then, Renault had invested in re-engineering its cars and suppliers were readying their capacities.

“It’s a sunk cost engineering wise ... now we are taking a U-turn and creating (six mandatory airbags) as an option for customers,” he said, adding that in future Renault will wait for final regulations before implementing them.

“If the government lays down a path of regulatory aspects, they should follow[it],” he said.

He said it costs millions of euro to meet regulatory changes but did not give specific details on what Renault spent to comply with the airbags proposal.

Renault’s concerns come a day ahead of one of the country’s largest gatherings of investors in Prime Minister Narendra Modi’s home state of Gujarat, where he will make a bid to lure companies there before standing for re-election later in 2024.

Renault’s worries echo a broader concern in the industry. At an event in 2023, transport minister Nitin Gadkari warned carmakers of higher taxes if they did not lower production of diesel vehicles. Hours later, he walked back on his comments but they had already led to a stock market rout.

Renault, known for its best-selling Duster SUV in India, saw domestic sales slide in 2023, but it has a growth plan in place with a greater focus on profitability than market share, Mamillapalle said.

In 2024 Renault will launch upgraded variants of existing cars, including its small car Kwid, the seven-seater Triber and sport-utility vehicle (SUV) Kiger with more technology and connected features to broaden its appeal to demanding, entry-level car buyers.

This is a run-up to a broader plan by Renault and its alliance partner Nissan to invest $600m in India over the next three years to boost sales, with the French company’s plans to launch five new cars including midsized SUVs and electric models starting in 2025.

The company expects to pump more money into the country beyond 2027 as part of a global plan to invest $3.2bn in markets outside Europe including Brazil, India and Turkey.

The company said in a statement that it continues to strengthen its local manufacturing commitment in India, supported by its production plant in the southern city of Chennai.

Reuters

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