Renault to launch more diesel models

With diesel variants now accountingfor over a fourth of India's passenger car sales, French major Renault hasdecided to roll out this fuel's versions in three of its new launches next yearwith more locally-sourced parts to cut costs.

"Every model which we launch next year will have adiesel version," said Len Curran, Renault India vice president for sales andmarketing. "Our focus is on diesel cars."

Last year, diesel cars accounted for 27 percent of the 2.52million passenger cars sold in Indiaand the Society for Indian Automobile Manufacturers (SIAM), the apex lobby forthe auto industry, expects this share to go up to 33 percent by the end of thisfiscal.

Renault has made this strategic move at a time when the autoindustry is facing a rough patch, following falling passenger car sales due tohigh fuel cost and soaring interest rates. Petrol prices were hiked five timesthis year, while diesel remained stable.

Also, the weakening of the Indian rupee against the USdollar has added to the woes of carmakers, making import of componentsexpensive and thereby pushing up input costs.

Renault has plans to launch Pulse, a hatchback in B segment,at the New Delhi Auto Expo in January 2012. In the second half of the nextyear, it will launch Duster, an SUV. In the fourth quarter of the year, it willroll out a sedan.

The carmaker, which entered Indiain 2005, says it expects Indiato become the world's fourth-biggest car market within three years. In March2010, the Renault-Nissan Alliance opened its unit in Chennai that has acapacity to produce 400,000 cars a year.

Renault launched a luxury sedan, Fluence, in May, that runson petrol and diesel. In September, it came up with a compact SUV, Koleos, whichoperates only on diesel. The company also has big plans for its K90 dieselengine in the Indian market.

Curran, who expects Indiato be the second fastest growing market after China, said his company aims tocover a minimum of 35 Indian cities through its distribution network beforeAugust 2012.

He said local sourcing was a strong strategy to cope withcurrency fluctuations. "The two vehicles launched in May and Septemberhave a very low level of localisation. But Pulse and Duster will have over 60percent of localised parts."

Asked whether the company would raise prices of its modelsif the rupee plunges further, the Renault executive said the company willfollow the strategies of other auto firms. "Our benchmark is thestrategies of competitors. We will be following the market."

On Wednesday, the company said it will raise the price ofKoleos from Rs.22.99 lakh to Rs.23.99 lakh from Jan 1, 2012, due to rupeedepreciation and rising input costs.