Renault is considering manufacturing mass-market electric vehicles in India – Reuters sources

Renault is considering manufacturing mass-market electric vehicles in India – Reuters sources

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©Reuters. FILE PHOTO: The taillight of a Dacia Spring electric car is pictured during the Brand Manifesto Dacia event at Le Bourget near Paris, France, September 13, 2022. REUTERS/Gilles Guillaume 2/2

By Aditi Shah and Gilles Guillaume

NEW DELHI/PARIS (Reuters) – Renault is considering building a mass-market electric vehicle in India, two people with knowledge of the ongoing review told Reuters, as part of a renewed push into a market where electric vehicle adoption is expected to grow rapidly becomes a small base.

The Renault (EPA:) study underscores how the French automaker is moving forward with its electrification plans even as it extends unresolved negotiations with its partner Nissan (OTC:) Motor to invest in an EV unit, which it is spinning off from its other operations want.

It also points to the changing perception of the auto market in India, which saw the fastest growth of any major market in 2022. Electric vehicles were on track to account for less than 1% of auto sales last year, but the government has set a target of 30% by 2030 and has recently been successful in attracting suppliers to international automakers with a series of subsidies.

Renault is considering launching an Indian-made electric version of its Kwid hatchback, people told Reuters.

The review will assess potential demand, pricing and the ability to build the electric vehicle with local components, one of the people said, adding that a launch would occur in late 2024.

The move is part of Renault’s broader plan to restart sales in a country where the automaker remains profitable despite selling fewer cars in 2022 than a year earlier, the person said.

Renault India declined to comment on the product plans but said the company has a “strong focus on electrification worldwide” as part of the strategy outlined by CEO Luca de Meo and that “India is one of the key markets” for the group .

According to a forecast by S&P Global (NYSE:) Mobility, India will become the world’s third largest market for passenger cars and other light vehicles, surpassing Japan. Industry-wide sales increased by an estimated 23% to 4.4 million vehicles in 2022.

This contrasts with the outlook for the United States, where next year the market is expected to remain below 2019 levels, and for China, where demand is weakening.

Renault had hoped to hold talks with Nissan in December over the terms of a spin-off of its electric vehicle unit, but discussions have been slowed by concerns from the Japanese automaker over a range of issues, including protecting its intellectual property.

“India will play an important role in future Renault-Nissan projects, but local plans will not be finalized before a global agreement is reached on an alliance restructuring,” one of the sources said.

In India, domestic automaker Tata Motors (NYSE:), which dominates EV sales, as well as foreign players such as Stellantis, Hyundai Motor and SAIC’s MG Motor are all poised to launch EVs.

Renault already produces a version of the Kwid EV in China, which is sold in that market as the City K-ZE and exported to France as the Dacia Spring. The Spring, the second best-selling electric vehicle in France in 2022, has a range of 230 kilometers and a starting price of 20,800 euros ($21,869) before government incentives.

To qualify for incentives in India, Renault would have to build the car at its alliance plant in southern India and source components locally, the first person said. The plant in India is majority-owned by Nissan.

Nissan declined to comment.

Renault currently produces the Kwid hatchback, the Kiger SUV and the seven-seater Triber in India. Sales fell 9% to around 87,000 units in 2022 and its market share fell to just over 2%.

As part of the restart in India, Renault also plans to invest in the refurbishment and modernization of some of its major dealerships in major cities, the person said. The company says it has 500 sales outlets in India.

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