Renault has been one of the few companies to succeed during the European economy crisis thanks to their low-cost vehicles. Now the automaker is taking their successful plan one-step further, by announcing a new $5,500 vehicle that will be sold in India within the next year.
Renault hired Gerard Detourbet, the creator of the Loan and most "Entry" models to develop the cheap car, which will be designed to compete with companies like Suzuki and Hyundai according to Reuters.
Detourbet has been "quietly building" an Indian supplier network with a team of local executives, some of which were convinced to leave jobs at rival companies.
If they're able to release a fully functioning vehicle for so little money, the company would then have a new weapon which its rivals wouldn't be able to compete with.
"We don't set out to poach people, but it happens that they sometimes come to us from Suzuki and Hyundai," said Detourbet in a recent interview during a return visit to Paris.
Suzuki Motors currently has the upper hand in India, due to its models that cost as little as $5,600. The company makes approximately $2.6 million each year in the country, but that number could be in jeopardy if Renault CEO Carlos Ghosn gets his way.
Renault's new vehicles will offer more room for a similar price that Suzuki offers according to Reuters. If the company is successful in India, they will most likely try selling the car in places like Brazil and Russia next where they would be competing with other companies like Volkswagen and General Motors.
"Once you've done battle with the world's best cheap car manufacturer, you can go into another country where there isn't a Maruti Suzuki and be relatively comfortable," said Detourbet.
Detourbet has worked for Renault since 1971 and quickly worked up the company ladder, becoming Senior Vice President in charge of gearboxes and transmissions in 1997. He has designed vehicles like the Duster SUV and Lodgy minivan which have become best-sellers for the company and allowed Renault to avoid company job cuts and plant closures according to Reuters.
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