Venkatram Mamillapalle is the Country CEO & Managing Director, Renault India Operations. His key responsibility is to lead the group operations and activities in the country, as well as make functional decisions and achieve the growth plans outlined for India. Before coming to India he was the head of Renault-Nissan-AVTOVAZ in Russia where he was part of a major transition, steering growth and profitability for the company. Prior to joining Groupe Renault, Venkatram held several leading positions with various Indian and global OEMs including Eicher Tractors, Delphi Automotive Systems, Tata Motors, Lombardini India and General Motors (Korea).
The automotive industry is at the cusp of its biggest ever transformation. OEMs are engaging with digitalisation, connectivity, and new mobility concepts like never before. As vehicle and component manufacturers the world over look to drive trends like autonomous and shared mobility, connected vehicles and the digital revolution, they are faced with slowing demand, particularly in developed economies. As global automotive production evolves, its centre of gravity is shifting to the Asian markets like China and India.
India, which is poised to be the third largest automobile market by 2022, is today a key market for all global OEMs and suppliers. India being a priority market, Groupe Renault has formulated a strong India-centric product strategy for Renault India which will be ready with products adhering to the norms and guidelines of the country.
The Indian automobile industry requires unique solutions in the mobility space. The need of the hour is to relentlessly promote a culture of innovation. With the entire auto industry undergoing a technological transformation on the fronts of emissions and safety, enhancing spend on R&D and creating infrastructure for innovation are of utmost criticality for the automobile and component industry to stay relevant. Facilitating new product development through technology advancement and acquisition as well as enhancing the rate of weighted deduction on R&D spend from 150 percent to 200 percent is the need of the hour. Technology development and acquisition for supporting R&D and indigenous technology development for shift from BS-IV to BS-VI, and electric mobility to meet new regulations on safety emission and environment are highly recommended. Out of all, R&D incentive is the most important for the automobile industry today as OEMs have to invest a significant amount of money over the next few years in R&D to meet various emission and safety improvements in India.
Move to BS-VI norms is another important aspect. From a production perspective, there needs to be a ramp up on existing lines by vendors to produce BS-VI components as well. This in itself is a huge challenge and there needs to be very high level of discipline in terms of meticulous planning and execution at the supplier end to meet this deadline. Having said this, the biggest challenge is the availability of BS-VI fuel all over India, wherein the Government would be required to supply it across the country at one go. However, India offers high growth opportunities led by lower car penetration and favourable demographics. Hence, we will have to adopt a calculative risk mitigation strategy to streamline our operations, amidst these challenges.
Our investments in new products, due to be launched this year, 2020 and beyond, will create new segments and set the platform for doubling our annual sales volume to 150,000 units in the next three years, and achieve break-even as per our mid-term plan.
Also, the focus would be to make dealer partners profitable, which in turn will lead to Renault’s turnaround. We would look at increasing our dealer outlets through our existing partners, especially in rural areas.
The investments can be on Product technology, Capacity expansion, Research, Automation and People; and all of these are important and inter-linked. Since this column is about change and technology, let’s assess the current environment that aims to drive the future of the automotive sector in India.
Clarity on the much awaited FAME II scheme with investment of Rs 10,000 is a welcome step which would enable OEMs to plan for future investments in EV products. Also, we expect further rationalisation of GST on electric vehicles and parts including CBUs to promote Green technology. In addition, a long-term R&D policy, as well as necessary training and skill enhancement initiatives is imperative to support the evolution of electric vehicles in India.
Coming to Renault India, I have lined up three objectives for the company. The primary objective is for the whole organisation to work as ‘one team, one ambition.’ The second objective is to keep the consumer at the centre of our focus on engineering, manufacturing, suppliers as well as dealers. The third is to double the annual sales volume to 150,000 units in the next three years as our mid-term plan.
Going forward, we will continue with our product offensive strategy in India and will work towards substantially growing the Renault brand in India by bringing excellence in services, and newer products with heavy emphasis on localisation.
We have lined up aggressive plans to double sales volumes in three years by introducing new products and upgrading existing models. As a mid-term plan, the company is looking at doubling the annual sales volume to 150,000 units. We also have a new product launch round the corner, Renault Triber and another new product planned for 2020. Besides, we have some exciting enhancements on KWID and Duster this year.