True Disruptors Of The Auto Industry: A 118 Year Old Carmaker, A 71 Year Old Man, A $4,100 Car

 

There has been a lot of talk about disrupting the auto industry. If you want to see disruption in full scale beauty, you must go to Chennai, India. The former Madras has become a veritable hotbed of automotive disruption, and not just because the mercury constantly flirts with the 100 mark. Some 30 dusty, and very nerve-rattling miles south of the airport is the Oragadam Industrial Corridor, and right in the middle of it is Renault’s and Nissan’s joint production site, trying to crank out the $4,100 Renault Kwid as quickly as it is snapped-up, usually by first-time buyers, who finally can afford a real car. 40 years ago, we finally could afford a real computer, 64K and all, now a real car can be bought at a similar price.

For those who think the outrageous price is not low enough, the factory has just started to produce a $3,700 derivative, the Datsun Redi-GO. Both are real cars, on a brand-new platform, and they already disrupted the marketing plans of Maruti-Suzuki, until now a monopolist of the stirring Indian car market, but probably not for a lot longer. (The secret of the cars’ ultra low price is revealed here. But does Renault-Nissan make money with the cars? The answer is here.)

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How Can A $4,100 Renault Kwid Make A Profit? The Answer Is Here

Renault took India by storm with its $4,100 Kwid, and Nissan’s Datsun is about to do it again with the Kwid’s shorter sibling, the $3,700 redi-GO. But do they make money? Didn’t GM just give up on India because it can’t turn a profit on a Chevrolet Beat that is a little shorter, but much pricier than the Kwid? Before I did set out to go to India, an executive of a very large Japanese automaker urged me to look very hard into the Kwid’s profitability, because he had it on what he thought was good authority that Renault is losing money on the car. Does the Kwid make, or lose money? I went to India to find out. (The story of what underpins the cars is here. The secret of the car’s ultra-low price is revealed here.)

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The Auto Industry’s Most Feared Disruptor Reveals His Secrets

Selling something suddenly cheap what previously was available only for a lot of money is an essential part of disruption. For 20 years, Frenchman Gerard Detourbet has disrupted the industry with cars at prices thought impossible to achieve. He scared Europe’s automakers with his half-priced Dacia cars. He cut the price in half again with the $4,100 Renault Kwid, and the $3,700 redi-GO, cars that put the Renault-Nissan Alliance firmly on the map of future growth market India. Many tried to replicate Detourbet, and failed. How does he do it?

I went to Chennai, in search of his secret. (The story of what underpins the cars is here. But does Renault-Nissan make money with the cars? The answer is here.)

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