Renault Kwid based sub 4 meter sedan plans shelved due to GST
Outstanding response to Renault Kwid had motivated the company to launch more new cars based on the same platform.
Common Module Family (CMF-A) architecture, jointly developed by Nissan and Renault has proved its stance on the Renault Kwid. This small car has been a huge success in the country and has managed to turn the tables for Renault in India. With over 1.5 lakh bookings, Renault Kwid waiting period today extends to up to 6-8 months. In order to meet demand, the company has increased production at their plant in Chennai.
This success of Kwid had resulted in Renault exploring the possibilities of launching more cars on the same platform as Kwid. As per reports from June 2016, Renault was planning a small sedan, a crossover and a small SUV. All three of these cars would be under 4 meter in length and will have its design inspired from the Kwid.
But as per latest reports, sourcing company insiders, Renault has shelved plans to launch a sub 4 meter sedan based on Kwid. The reason cited is due to the implementation of GST (Goods & Services Tax) by the Indian government. This new tax structure, which is being implemented from next fiscal, will remove the excise duty benefits enjoyed by small sub 4 meter cars currently in India.
As per the current structure, those cars which are smaller than 4 meter in length, and are powered by engines smaller than 1.2 liter (petrol) / 1.5 liter (diesel), will be given excise duty benefits as opposed to those cars which are not. But once GST is implemented, this excise duty benefit will no longer be playing any role.
Speaking about plans, Renault India aims to introduce at least one new car each year. This will help the company to increase sales and consequently their market share, which currently stands at about 4%. The company’s market share has seen a steady rise from a 9th position in 2014 to 8th spot in 2015 while Renault India is currently the 7th largest automaker in India positioned after Maruti, Hyundai, Mahindra, Honda, Tata, and Toyota.