French carmaker Renault is constructing a small car from ground up to take on the likes of Maruti Suzuki's Alto, Hyundai India's Eon and Chevrolet's Spark, in the segment that makes up for about 40-45% of India's car market.
Work has begun on the car codenamed "A Entry" under the leadership of Gerard Detourbet, Renault's low-cost car specialist. The car will be powered by an 800cc engine.
ET learns that Renault has started working on the smallest engine yet in its global portfolio codenamed B4A, which is likely to deliver a mileage of over 20 km a litre. The entry-level car segment in India ranges in the price bracket of Rs 1.5 lakh to Rs 4 lakh.
Three persons close to the development told ET that the small car is likely to be rolled out from the Renault Nissan Alliance plant in Chennai. The new car may hit the market in 2014-15.
The 'A Entry' car is a global product and is being developed keeping emerging markets in mind, a source said.
"The internal target is to get the ARAI rating of 24-26 km per litre, with the car delivering at least 20 km per litre in city driving conditions," said one of the persons who confirmed the development.
DETOURBET TO SPEARHEAD PROJECT
Renault India spokesperson Rajiv Mitra told ET: "We might look at a car below the Pulse in future."
About specific queries on the timeframe, engine specs, these are all speculations at this point of time. As a company policy we don't comment on speculation by the media."
Renault had appointed Detourbet, who had in the past delivered on cost, quality and reliability with the Logan, to spearhead this project in November last year. After a series of studies, the French carmaker has decided to begin work. The key development is currently underway at the Renault Nissan Technology & Business Centre India in Chennai.
A person close to the development said the thought process of developing a small car for India began way back in 2006, when Renault got the first taste of the Indian market with the Logan. It realised that to make it big in the Indian market, the small car platform was absolutely critical.
"The European small car, Clio, would have been very expensive; so Renault knew the company will have to develop an entry-level car platform for the emerging markets led from India," the person said.
At the height of the economic meltdown in 2008, when projects and investments were put on hold, the two key projects that continued were the 'A Entry' and Electric Car platform.
For about a year or so, Renault relied on Bajaj for an entry-level car, but soon realised the need to develop an entry-level platform on its own for the emerging markets, irrespective of the development of the ultra low-cost car at Bajaj. Renault constructing 800cc small car to take on Maruti, Hyundai and others - The Economic Times