‘No real danger to ultra low cost car project’

Sylvain Bilaine established Renault SA’s India operations and successfully managed the company’s multiple relationships here since 2004. A 25-year Renault veteran, Bilaine was instrumental in negotiating the marketing joint venture with Mahindra & Mahindra for the Logan as also theRenault-Nissan manufacturing facility at Chennai. He has also been the Renault representative in negotiating the Ultra Low Cost (ULC) car project of the Renault, Nissan and Bajaj combine. Now that he is quitting Renault to become an entrepreneur, DNA caught up with him on his experiences in India.
Excerpts:

On his stint in India
I started off by studying the Indian market from Paris, making frequent visits to India and negotiating the creation of Mahindra-Renault Ltd (MRL) in April 2004. The creation of Renault India Ltd as a 100% subsidiary was the next big task.

My India stint has been an interesting and a learning journey... I leave with a deep sense of satisfaction at having kick-started Renault’s involvement with India and ensuring that our partnerships with Indian companies evolve and flourish.

Getting MRL up and running was easy as we had M&M with us. But our experience with setting up Renault Nissan Automotive India Ltd in Chennai was an eye opener in many ways — we were amazed at the level of support we got. Most of the people that we had to interact with were very knowledgeable and articulate.

On Logan performance and whether Mahindra-Renault needs further investments
The Logan plant was set up with a peak capacity of 50,000 cars per year... something we expected to reach in 3-4 years. It may not have been a blockbuster, but by all accounts, did fairly well in the first 12-15 months, notching up sales of more than 33,000. Of course, what hit us most was that the economic scenario started to deteriorate in July-August 2008 and there was nothing we could have done to stop the slide. However, even during these tough times, the ‘Limited Edition’ Logan – Logan Edge – was a sell-out in 60 days.

On the slow progress of ULC project
The ULC project started a year ago as a dream in Carlos Ghosn’s eyes. He was not only convinced that such a project was absolutely feasible, but was also sure that it could be conceived and realised only in a country like India, which has enormous engineering strengths and is skilled at “frugal engineering”.

We have progressed fairly well since then and are now in a position where we can see the project taking shape in the next few months... of course, taking into account some of the re-working that is currently being undertaken by the Renault-Nissan-Bajaj teams.
Since this project is still in the late stages of evolution, it does not require any immediate cash injection (which I agree is in short supply)... hence, there seems to be no real danger of it being affected by the current economic scenario.

On the Chennai facility and whether a third partner is needed
We are absolutely committed to building the car manufacturing facility along with Nissan. Once M&M pulled out of Chennai, the Renault-Nissan Alliance took over the project and even increased the investment and capacity, demonstrating commitment to the Indian market.

Construction activity commenced in December 2008. Then, due to the severe economic crisis, Renault has now announced a temporary freeze/delay in product plans from Chennai. But that does not mean we are walking out of the project.

The alliance is going ahead with the construction of facilities for a 4,00,000 car plant and Nissan will roll out its first car around mid-2010. We are monitoring the economic situation on a monthly basis and the moment we see a window of opportunity, Renault will revive its product plans. Let me assure you that Renault is committed to the Indian market and we are here for the long haul.