Fabrice Cambolive, Chief Growth Officer Renault Group & CEO Renault brand at the unveil of Iconic Duster.As Chief Growth Officer, Renault Group & CEO, Renault brand, Fabrice Cambolive believes it is important to leverage partnerships optimally worldwide.
The French automaker recently announced an alliance with Ford for electric vehicles in Europe and has deepened the bond with Geely of China for Brazil and Korea. “We are also working with Nissan and with Google for Duster,” he told ET Auto during the recent launch of the Duster in Chennai.
“It means we have a real capacity to develop useful, pragmatic partnerships. We are not big but we have gained a lot of speed and are very agile. And that is what we are doing now as a strategy,” added Cambolive.
As he put it, what is important now in the world is to acknowledge that, while it is difficult to make a global car, what truly works is a global cross-car line strategy. According to an AI-generated explanation, this refers to an automotive manufacturing approach for managing common vehicle architectures on a single assembly line.
“When you want to be the best in terms of connectivity, we decided to benefit from what we did in Europe with Google. We have now used this experience to put Google in Latin America and now here in India,” he elaborated.
We can offer industrial capacity here in India but are also building cars for Nissan in Europe on our pure electric BEV platformFabrice Cambolive
Using partnerships effectively
According to him, it is “very interesting” not only to have several partners but also to be capable of crossing the car line with some technology and the line-up across regions worldwide. A second example, “which is very important”, is hybrid technology. “We are one of the top players — the top three actually— and I think the second brand in terms of hybrid sales in Europe,” said Cambolive. All this means that Renault is benefiting from expertise and technology, which is “securing us with Geely” to make the “best dynamic car” with hybrid technology and the lowest fuel consumption.
“If you look at a company like Renault, we do not have so many partners. However, each partnership is bringing us a huge win-win approach and we are benefiting from that,” he continued.
This being said, what is important here in India — “now that we are the owner of our plant” — is to localise as rapidly as possible to benefit from the cost-competitiveness of the country’s supplier base.
“And for that, we will do it alone and if we can have some partnership, we will be open to discussing the possibility,” said Cambolive.
It (the possibility) is not closed but I would say that what is important in this strategy also is to keep our knowhow and to be really balancedFabrice Cambolive
Nissan’s rebooted role at Chennai
For now, Renault’s longtime ally, Nissan, will use the Chennai facility under a contract manufacturing agreement. The Japanese automaker was the majority stakeholder in this alliance for plant operations, but recently exited, with Renault now in the driver’s seat at Chennai with 100 per cent ownership. Nissan will, meanwhile, continue producing cars in the new business model.
“With Nissan, we have quite a few interesting projects. We can, of course, offer industrial capacity here in India but are also building cars for Nissan in Europe on our pure electric BEV platform,” said Cambolive.
Renault first bought a majority stake in Nissan over 25 years ago as part of a revival strategy, when the latter was virtually down and out. The partnership was among the most successful in the world’s automotive industry and was constantly a point of reference, especially when other marriages like Daimler and Chrysler imploded after promising the moon.
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However, things took a turn for the worse when Carlos Ghosn, the CEO of the Renault-Nissan alliance, was arrested in a dramatic turn of events in 2018. Nissan had laid a careful trap for him when he landed in Tokyo, and even after Ghosn managed to escape after a year, relations between the two partners went for a toss in later years.
The Geely factor
In more recent times, Renault has forged a close alliance with Geely, and speculation is rife that it may be open to offering the Chinese company a stake in its Chennai operations on the lines of what it recently did in Brazil. India could, however, be a different ballgame given the round of army hostilities along the border during the pandemic, which has resulted in a freeze on new investments from China.
Things are much better now in terms of policy relaxations, as evidenced by the MG Motor restructuring plan, which saw SAIC, the Chinese owner, divesting a part of its stake to the JSW Group. Likewise, with its 20 per cent global ownership in Leapmotor, a Chinese company, Stellantis plans to bring the company’s products to India.
Will there be a similar script unfolding for Renault, where Geely can make an entry into India and give a leg-up to the Chennai operations?
“It (the possibility) is not closed but I would say that what is important in this strategy also is to keep our knowhow and to be really balanced,” said Cambolive.
As he explained, “I think that in India, we have the chance to have a very deep and localised platform which is in our ownership. What we have to demonstrate first is our capacity to be competitive with this platform and then use this to launch several models. That is what we will work as a priority for the next few years in India.”
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Indian flavour for Duster
Cambolive said Renault continued to have “a good collaboration” with China, given that it had developed part of its cars with Chinese engineering. With the all-new Duster, the focus was to work with Indian engineering alone, and, consequently, the level of “competitiveness of the car is very good”.
Going forward, the task is to feed the Chennai plant with several models, not only for the local market but also for exports. “We renewed Kiger and Triber a few months ago and have now unveiled Duster. It means that we will come back at due time with some other models,” added Cambolive.
The company will hope to reach the Chennai facility’s optimal capacity of 480,000 units by 2030. “What we have to do is execute our job well and launch several models,” he said. It is in this context that the role of Nissan assumes significance, since its own production plans will assure greater scale and the costing efficiencies that will follow.
The three-point mantra for volatility
In today’s hyper-volatile world, Cambolive said companies needed to respect some “very simple and strict” rules. “One, when you want to sell in a market, you have to be industrially localised. With this, you can manage some risks like rate exchanges. You can manage regulatory and geopolitical risks too. It means the first rule is to be as close as possible to your customer,” he elaborated.
The second rule is to be able to share new technologies worldwide. “That is what we do when we operate between India, Europe and Latin America. Finally, you also have to bet on very, very loyal and trustworthy partners. That is the third part of the recipe,” signed off Cambolive.
