The French automotive brand has posted a net profit of Rs 332 crore helped by new models like Triber and Kiger.
17 Nov 2022 | 18372 Views | By Ketan Thakkar
French automotive brand Renault’s India journey has been eventful despite the challenges. India was amongst the brand’s top-five markets globally. Renault India has announced that it has broken into annual profit for the first time in almost half a decade in FY22, as a series of cost cutting measures and ...
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French automotive brand Renault’s India journey has been eventful despite the challenges. India was amongst the brand’s top-five markets globally. Renault India has announced that it has broken into annual profit for the first time in almost half a decade in FY22, as a series of cost cutting measures and a strong volume growth in domestic and export markets helped the company to return to black.
During FY22, Renault India posted a net profit of Rs 332 crore versus Rs 160 crore of loss it posted in FY21. The revenues of the company grew 27 percent to Rs 7,426.2 crore for FY22 driven by higher exports and increased domestic volumes helped by new models like Triber and Kiger.
Reviewing the performance for FY22, the director’s report stated, “The company showing better profitability in FY22 was on account of a better model mix and the full year volume of Kiger which was introduced in Feb 2021. Besides, exports volume has demonstrated a good increase year on year and a better After Sales business contribution has fuelled the company's profitability.”
In a recent interview to Autocar Professional, Renault India Managing Director, Venkatram Mamillapalle had said the company was on track to attain its target of breaking into profits in 2022.
Riding a bumpy road
“The volume growth could have been higher if not for the shortage of parts. All three models – Kwid, Triber and Kiger are chipping in with good volumes with incremental sales coming from rural areas. Exports too are helping the bottomline,” Mamillapalle added.
For the current calendar year 2022, Renault India is expected to close with volumes of about 1.1 to 1.2 lakh units including exports. The director’s report said that in a market of 3.07 Million Units in FY22, Renault India had achieved a 2.8 percent market share.
This growth in volumes and profits were in the face of strong headwinds for the company.
“The industry in entirety has seen growth of 13 percent in FY22, whereas your company is not falling in the same growth lines due to the electronic chip /Semiconductor crisis and material shortage which factored in a slowdown in production pace,” the director’s report said.
The report added that the raw material shortage and supply chain challenges due to Covid-19 resulted in a steep increase of raw material prices. The price of hot-rolled steel rose nearly 92 percent in FY22, while cold-rolled steel was up 77 percent, this pushed up vehicle prices by 15 percent in FY22.
Changing Trends
Renault India says the mobility landscape is transforming with ACES trends — autonomous driving, connected cars, electrified vehicles (EVs) and shared mobility — and Indian automakers are competing to gain a competitive advantage in this field.
Today, however, only about two percent of new vehicles sold globally are electrified. The lack of supporting infrastructure for EVs is also inhibiting sales (in countries like India).
The government on its part has introduced a battery-swapping policy, which will allow drained batteries to be swapped with charged ones at designated charging stations, thus making EVs more viable for potential customers, said the company.
Autocar Professional learns that Renault is likely to bring in its first EV Completely Built Unit car in 2023 and it may be a Megane EV.