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India's finicky car buyers embrace Renault hatchback

Renault's Kwid hatchback is displayed at a dealership in Mumbai. The model is selling strongly in India partly due to its SUV-like styling.

MUMBAI -- Renault's Kwid, a small hatchback, is helping boost the French carmaker's sales in India even as local consumer preferences are shifting toward larger vehicles.

Released in September 2015, the Kwid has been logging monthly sales of around 10,000 units. That helped Renault sell about 70,000 cars in India in the April-September period, more than four times the number sold a year earlier, as the company closed in on rivals including Tata Motors and Honda Motor.

Industry watchers questioned the release of the Kwid as Indians increasingly prefer SUVs and sedans with engine displacements of 1,200 to 1,500cc. However, the Kwid, with a displacement of 800 to 1,000cc, has been luring young consumers looking for an entry-level vehicle, due to its low price and SUV-like appearance. The car is priced from about 260,000 rupees to 400,000 rupees ($3,800 to $5,900).

A buyer in his 30s praised the Kwid's fuel efficiency and looks, saying he has already driven the car more than 10,000km since he purchased it two months ago. The man said he also likes the car's digital instrument panel.

An executive at Gen Next Motors in Mumbai called the Kwid the best buy in its category. The dealer sold 125 and 140 units of the Kwid in August and September, respectively.

Renault CEO Carlos Ghosn unveiled the Kwid at an event in the southern Indian city of Chennai in May 2015, calling it a "car for conquest." The model's principal rivals are Maruti Suzuki India's Alto and Hyundai Motor's Eon. Maruti, an affiliate of Japan's Suzuki Motor, is the country's largest carmaker, while South Korea's Hyundai is No. 2. 

The local content of the Kwid is 98%.

Renault's Duster SUV sold strongly in India in the past, but the French company's local market share remained low, at around 2%. The Kwid has raised the market share to more than 4%.

Overseas and local automakers have been rapidly introducing new models to compete for sales in India. Car buyers in the South Asian nation are highly selective and pay close attention to each model's interior, appearance, and economic efficiency including fuel consumption. The number of models considered hot sellers in India is limited.

Rival carmakers are preparing measures to counter Renault's success with the Kwid, which could threaten its future sales. Still, the brisk demand for the model is encouraging other automakers to challenge the existing industry leaders, such as Maruti.

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