Renault has recovered enough from its financial doldrums to re-ignite investment in India, with the French carmaker announcing plans to roll out a dealership network for five cars it plans to sell in India by 2014.
Renault had pledged to invest, with partner Nissan, 45 billion rupees ($967.7 million) in a 400,000 unit factory and an engineering center in the southern city of Chennai, but poor global performance forced it to freeze investment in India and Morocco in December 2008, said Marc Nissaf, managing director of Renault India.
"We had to hit the brakes, not because of India but the overall economic situation," Nissaf said Tuesday.
Renault plans to open 15 dealerships by the middle of next year, to coincide with the launch of its first made-in-India Renault brands, the Fluence sedan and the Koleos crossover SUV. It hopes to open 30 to 40 new dealerships each year after that.
Nissan declined to say how much money the move will cost.
Nissan has continued plowing ahead, and the Chennai factory, now with 200,000 capacity, is scheduled to be inaugurated the third week of March.
Renault executives said they plan to add a second production line after the global economic recovery solidifies, but declined to give a timeframe.
Global automakers like Ford, General Motors, Volkswagen and Nissan are rushing into India, hoping to capture a piece of the country's fast-growing auto market.
Like others, Renault has struggled to gain a foothold in India, where car sales are dominated by Maruti Suzuki and customers overwhelmingly prefer small, affordable vehicles.
Renault entered a joint venture with Indian automaker Mahindra & Mahindra to produce and distribute a co-branded Logan sedan. It has lost about 70 million euros ($95.9 million) on the venture in the last three years, and is negotiating a restructuring, executives said.
Renault and Nissan are also working with India's Bajaj Auto to create a car to compete with the super-cheap Tata Nano by the end of 2012.
Unlike other global automakers, Renault doesn't plan to use India as a small car export hub, Nissaf said. The company has ample capacity in France, Spain, Slovenia, Turkey and Romania, and its manufacturing alliance with Nissan will give it scale in negotiating with suppliers, he said.
"India by itself has to be auto-sustainable," he said. "With the size of the market, we should be able to make a living out of it."
Last year nearly 2 million cars were sold in India.
Renault owns 44 percent of Nissan, and Nissan owns 15 percent of Renault.
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