PARIS — Renault is considering building an electric car for the mass market in India, two people familiar with the ongoing review told Reuters.
The Renault investigation comes as the French automaker continues electrification despite extending outstanding talks with partner Nissan over an investment in an EV unit it plans to spin off from its other businesses. It emphasizes how the plan is being promoted.
It also points to a changing perception of the Indian automotive market, which will grow the fastest among the major markets in 2022.
EVs were on track to make up less than 1% of car sales last year, but the government has set a target of 30% by 2030, attracting suppliers to international automakers with various subsidies. It has been successful recently.
Renault is considering launching an electric version of the Quid hatchback made in India, a source told Reuters.
The review will assess potential demand, pricing and the ability to build EVs using local components, one of the people said, adding that the launch is in the second half of 2024.
The move is part of a broader plan by Renault to revive sales in 2022 in countries where it has sold less than in the previous year but remains profitable, the people said. .
Renault India declined to comment on its product plans, but said the company is “focusing on electrification globally,” as part of a strategy outlined by CEO Luca De Meo. “India is one of our key markets” for the group, he said.
India will become the world’s third largest market for passenger cars and other light vehicles, displacing Japan, according to a forecast by S&P Global Mobility.
Industry-wide sales will grow by an estimated 23% to reach 4.4 million units in 2022.
This contrasts with the outlook for the US, where markets are expected to remain below 2019 levels next year, and China, where demand is weakening.
Renault had hoped to reach an agreement with Nissan on the terms of a carve-out of its EV division in December, but talks have been delayed by Japanese automakers’ concerns over various issues, including intellectual property protection.
“India will play a key role in future Renault-Nissan projects, but local plans will not be finalized before a global agreement on restructuring the alliance is reached.
In India, domestic automaker Tata Motors, which dominates sales of electric vehicles, and foreign companies such as Stellantis, Hyundai Motor and SAIC’s MG Motor are planning to launch EVs.
Renault is already producing a version of the Kwid EV in China, marketed as the City K-ZE in that market and exported to France as the Dacia Spring.
The second best-selling EV in France in 2022, the Spring has a range of 230 km and a starting price of €20,800 ($21,869) before government incentives.
To qualify for the incentives in India, Renault would have to build its cars at partner plants in southern India and source parts locally, the first person said. The Indian plant is majority-owned by Nissan.
Nissan declined to comment.
Renault currently builds a combustion engine Quid Hatchback, a Kiger SUV and a seven-seater Triver in India. Sales in 2022 fell by 9% to around 87,000 units, and his market share fell to just over 2%.
As part of India’s reboot, Renault will also invest in refurbishing and upgrading some of its major dealerships in the big cities, the sources said.
The company says it has 500 outlets in India.