Renault, the French automotive giant, is calling for regulatory discipline in India as it gears up for new investments in the country’s competitive auto market. The automaker’s country head, Venkatram Mamillapalle, emphasized the need for regulatory clarity after Renault incurred unnecessary engineering costs due to New Delhi’s decision not to implement a proposal mandating six airbags in cars.
With less than a 2% share in India’s thriving auto market, Renault is strategically planning additional investments. However, the company is reevaluating its approach to regulatory changes in response to the challenges posed by the evolving landscape of automotive policies in India.
India had proposed mandating six airbags in all new cars sold after October 1, 2023, but the decision was put on hold, leading to a substantial impact on Renault’s engineering investments. Mr. Mamillapalle stated that such regulatory changes entail significant costs, emphasizing the importance of clear and consistent regulatory roadmaps.
Renault’s country head mentioned that millions of euros were spent to comply with the airbag proposal, which has now become a sunk cost. Moving forward, Renault aims to wait for final regulations before implementing engineering changes, adopting a more cautious and disciplined approach.
In a subsequent statement to Reuters, Mr. Mamillapalle welcomed India’s consideration of six airbags as “a welcome step” and encouraged further investment in this safety technology. He highlighted Renault’s commitment to championing safety in the automotive industry.
Renault’s concerns regarding policy implementation align with broader industry apprehensions, reflecting the need for stability and consistency in regulatory frameworks. The automaker’s strategic shift comes ahead of a major investor gathering in Gujarat, where Prime Minister Narendra Modi aims to attract companies before the upcoming elections.
Renault, renowned for its best-selling Duster SUV in India, plans to focus on profitability over market share. In 2024, the company will launch upgraded variants of existing cars, incorporating more technology and connected features. This sets the stage for a comprehensive plan, with Renault and its alliance partner Nissan committing to invest $600 million in India over the next three years to boost sales.
The French automaker’s long-term vision includes launching five new cars, including mid-sized SUVs and electric models, starting in 2025. Beyond 2027, Renault anticipates further investments in India as part of its global plan to invest $3.2 billion in markets outside Europe, including Brazil, India, and Turkey.
As Renault solidifies its strategies, the company expresses confidence in its commitment to the Indian market and emphasizes its intention to stay and thrive in the evolving automotive landscape.
