Why This $4,000 Renault Is as Disruptive as the Tesla Model 3
Want to see the future of transportation? Spend 96 hours in India.
What is disruption? Ask the clickbait mills and the sheep who retweet them, and thy name is Tesla. Everyone knows the Tesla narrative. Autonomy! Electrification! Superchargers! Musk! If it weren’t for Tesla, we’d still be waiting for our electric and autonomous future to dawn. The Model 3 will disrupt, just as Tesla has disrupted the entire automotive sector, and now you can own one for only $35,000, plus options. It’s all true, but it’s only half right.
Go to India and Renault will sell the other half of disruption for just under $4,000.
This French-Indian disruptor is called the Kwid, and it’s the opposite of the Tesla Model 3 in almost every way. It lacks any of the technology or performance that earn cars placement on magazine covers. It’s a front-wheel-drive, 3-cylinder, 800-cc, four-door compact crossover (CUV) with plastic cladding. Boxes ticked? None. And yet it is the most important car in the largest segment in what will soon be the third largest car market in the world.
The reason it's so important is not because of its price, but because of what it represents, which is why the unlikely story of the Kwid says as much about Tesla’s future as it does about India’s.
Let’s go to India and find out why.
(This is Part 2 of my trip around the world to investigate the the future of transportation. Read part 1, The Secret Behind Norway's EV "Miracle" Isn't Oil.)
What Is Disruption, Anyway?
Those invested in the traditional disruption narrative would have you believe it’s definition is limited to autonomy, electrification, and still undefined pitch words like mobility—a first-world view easily digested in the United States, whose 321 million citizens comprise only 4% of the world population. Throw in similar markets like Canada, Western Europe, Japan, and Australia and we’re still only talking about about 14% of the world’s 7.3 billion people.
For the other 86% of human souls, disruption means other things. In the developing world, its manifestation might take the form of a bicycle. In places like China, it might be having the right to own a car, or a place to park one. In India, where the average wage remains a fraction of those in the first world, it starts with an affordable car that isn’t a complete piece of junk.
And that’s where the Kwid comes in.
Disruption by Kwid
Among India’s 1.3 billion, the most popular form of transportation is the moped. Traffic fatalities here are among the highest in the world, with more than 200,000 people killed in 2015. The weather? Perfect... or monsoon. Road quality and traffic resemble Los Angeles after The Big One, and will hobble almost anything larger than a VW Golf on 13” wheels. Between two-wheelers (most of which are ridden sans helmet) and entry level 4-wheelers (most of which are awkwardly styled and sit on old platforms) Renault saw an opportunity.
“If you want to enter a market,” philosophizes Gerard Detourbet, father of the Kwid, “you must start at the bottom.”
A recent entrant to the Indian market, Renault had a lot of work to do. The failure of the Tata Nano—launched in 2009 for just under $2000—made it clear price alone doesn’t move cars. Build a cheap looking car for poor people, and poor people might not buy it. Neither will those who can afford a second car for running errands.
“You must give customers something they’ve never seen before in the segment,” said Detourbet.
After much heated debate, Detourbet and Renault-Nissan CEO Carlos Ghosn agreed to design a new car from scratch. Detourbet, a mathematician who readily admits he's not a car guy, defined its unique elements. It would be the same price as the sector-leading Maruti Suzuki, but with more space. It would include a 7” infotainment system with a touchscreen. It would have real ground clearance. It would resemble a smaller version of Renault’s wildly popular Duster SUV.
It would have to look and feel special.
“When the Duster arrived in India in 2012,” said Detourbet, “it was like it came from moon.”
Three years after the Duster helped kick off the small SUV craze in India, the Kwid would do the same for CUVs. “In India,” he said, “you cannot look or be strange. Choosing a new entrant is a risk. You have to be careful with your money. A new product must be different. You have to create a feeling.”
That any $4,000 car can create a positive feeling seems miraculous, and only becomes even theoretically possible because of Detourbet’s merciless “design-to-cost” strategy. In order to meet his cost targets without sacrificing quality, Renault’s traditional suppliers were almost completely bypassed and replaced by local companies, whom Detourbet hammered to cut costs, part-by-part, until even the base model could be sold at a profit.
“If we worked with global suppliers,” said Detourbet, “we could never achieve the cost goal. In India, Suzuki uses multiple suppliers. We use one. It forces trust. It builds a relationship. It allows us to design for our suppliers. If we are working with global suppliers, we are not designing to cost. Design-to-cost takes longer, but delivery dates are not relevant. The Kwid’s design-to-cost took one year. This strategy isn’t a choice, it’s an obligation. If the cost of our car doesn’t meet our target, this won’t work. If the car was $40,000, I would not do this, because the time to market is more important than cost.”
Two hours with Detourbet was compelling, but not necessarily convincing. No amount of French-accented English, diagrams and hand-waving could convince me the Kwid was anything more than an inexpensive French car, slightly better than its rivals, stripped of weight and cost by removing airbags and sound-deadening material.
It was time to drive one, but Renault had other plans for me first.
The Buying Ceremony
American car dealerships are generally terrible places. Have you ever cried in a car dealership? I have. It wasn’t in a good way, and I know I’m not alone. If you’re lucky, the delivery might go well, as in the car moves under its own power off the property without incident. If not, you will drag yourself back for warranty service, to be sold and upsold and cross-marketed and lied to by people who see a target on your back pocket. And then one day your warranty will run out. True happiness is impossible inside a dealership. It can only begin by leaving.
Then I was taken to Chennai’s westside to Power Renault Kattupakkam, and I saw something marvelous, heartbreaking and beautiful. I witnessed the delivery of a brand-new Renault Kwid to the Sivaraman family—it was their first car—and everything I thought I knew about the future of transportation was upended.
First, the entire sales staff awaits you in the dealership lobby, sincerely happy to see you.
Other than regional director R. Mannivanan—present only to greet the American journalists—every one of these people attends every customer delivery.
And yes, everything I’m describing is standard for all such deliveries in India.
Next come bouquets of fresh flowers.
Then we proceeded to the delivery area...
...where Mrs. Sivaraman unveiled her new Kwid...
...after which it was time to cut the cake.
Everyone claps. Vigor ranged from sincere to wildly enthusiastic.
“Then,” explained the earnest Nikitha, whose English is superior to almost every car dealer in New York's Tri-State area, “we do a Puja...an Indian method of welcoming, because a car is an asset. For every asset we always do a small Puja to bring good luck and prosperity to the family.”
More broadly, the word Puja means reverence, honor, adoration and worship, and a Puja is a prayer ritual meant to spiritually celebrate an event. Can you imagine an American car dealer consulting a member of the clergy for any purpose other than asking forgiveness? A rabbi? An imam?
Well, here’s your Hindu priest about to perform a Puja on behalf of the Sivaramans’ new car, which begins with the lighting of the Diya, or incense stick.
The priest then blesses the front of the car, in which the keys sit inside a wreath...
...then the blessing of the interior…
...and each of the four tires.
...offerings are made...
...followed by the ceremonial key handover...
...then the placing of lemons under all four tires...
...over which Mr. Sivaraman drives...
...for good luck.
It is then time for final handshakes and goodbyes.
This will be repeated six more times before the end of the work day.
My mind bent. Short of a supercar delivery, I have never witnessed such time and effort spent on a customer. Actually, that’s the jaded American in me talking. Power Renault Kattupakkam didn’t spend this time and effort. They devoted it. They invested it, in a way merely given lip service during the sales training most American salespeople allegedly get, and which clearly isn't building goodwill with customers.
In the US, everything about the car ownership experience — from research to negotiation to delivery to service — has been utterly and depressingly commoditized. Any positive emotional relationship between sellers and buyers has been sacrificed on the altar of efficiency. With rare exceptions — generally limited to the ultra high-end — the American buying experience is a circle of resentment. It’s I want your time vs. I don’t have much time.
The only thing left to savor is the driving experience, if that, which is — literally and figuratively — a long way down the road for Indian car shoppers.
Which is why the Kwid is as disruptive in India as Tesla’s Model 3 is in the United States.
What The Kwid Represents
For the 90% of Kwid customers whom — like the Savarimans — are first time car buyers, ritual matters. The Puja respects Indian culture, within which a major investment like a car isn’t a commodity, but — as Nikitha explained more than once — an asset. The Puja isn’t about paying respect to the customers for having bought the car, but to the investment itself. The Puja recognizes the value of the car to the customers, incorporating the investment into their pre-existing belief system. The Savarimans aren’t being asked to join the cult of Renault in the way Ford or Chevy market the Mustang or Corvette. They are witnesses to Renault bringing the Kwid into their lives by fitting it into cultural norms; a crucial lesson about how spiritual practices can be respectfully leveraged to build brand loyalty.
Respect is everything.
If the Kwid were junk, the delivery ceremony would still have tremendous power, but it isn’t. It’s an adorable little tank that delivers far more than it should at its price. It doesn’t feel cheap. It feels like quality. It feels like the investment that it is, from a foreign brand trying to build trust, delivered within an ecosystem of respect, from sales to service.
Did I mention service? If your Kwid breaks down in a remote area, don’t worry, Renault has a traveling pop-up service program. If that sounds familiar, it’s because that was Tesla’s strategy when the Model S launched in 2012.
What the Tesla Model 3 represents to highly-educated, jaded Americans for whom feature-packed, commoditized luxury cars are old news, the Kwid is to Indians for whom pride of ownership is rare in a segment dominated by legacy platforms.
Americans have their pick of well-optioned cars at every price point, and yet the cult of Tesla has coalesced around cars that often cost more—not less—for the privilege of owning an EV and being part of the ecosystem that comes with it. It’s not just autonomy, which was only a fairly recent (and partial) addition. It’s also the direct sales, the no-haggle pricing, the infrastructure, and pride in supporting the belief that there is a better way. For every customer complaint, there are countless Tesla owners who will forgive almost anything, because Tesla and Teslas—even when they have problems—represent a liberation from the resentment and hostility generated by a sclerotic car industry and a franchise dealer model it still can’t escape.
Human psychology will forgive a new entry for taking risks on our behalf, but will never trust an old one who repeatedly does so at our expense. Whether Tesla fans they are right or wrong is irrelevant. This psychology is the power behind the Tesla brand, and the reason the Model 3 pulled in some 400,000 pre-orders. These customers want to feel pride. They want in on an idea they believe in. The Model 3 — at half the price of an S — is their entry point.
The same psychology is behind the Indian Kwid. A foreign brand with a better way. Affordable cars don’t need to be cheap. Infotainment AND a GPS? Luxury can be mine. Reliability is within reach. This investment will last. If something happens, they will be there. This purchase was a wise one. When things thought impossible become possible, that is disruption. Whether Kwid buyers are right or wrong is irrelevant. That they believe it is everything.
Actually, it’s not everything, because the Kwid is truly fantastic.
In a market like India’s, disruption is an entry level car that can keep up with cars three times the price, with suspension travel that can handle the moonscape of urban centers, with decent handling and fuel economy, with space for five (or seven, based on what I saw) and a real trunk.
Autonomy? Electrification? These are light years away from India’s reality. You couldn’t give a Model 3 away in Chennai or Bangalore. From wheel size to suspension to charging to structural integrity, no Tesla would survive, at any price. They’re not designed to.
Nor would the Kwid survive in the American market, where the Kwid arrived in the 80’s in the form of Japanese subcompacts. But in India, the Kwid is as unique as the Duster before it. India has only sixty million cars on the road in a country of 1B+, and the Kwid may be the first car to deliver a Model T moment: a car linking mass production and affordability with first world iterations of pride and luxury.
“You must,” as Detourbet pointed out, “give customers something they’ve never seen before.”
For Indians, that’s a Kwid. For Americans, that’s a Tesla.
In India, a Tesla is literally from the future. An Indian future that’s coming, but one built upon a universe of customers that need to own a moped first, then a Kwid, then something else while they wait for infrastructure to catch up.
Indian driving culture may take a lot longer.
The Indian and American markets may be half a world and many decades apart, but human nature is fundamentally the same. Understand it, and Tesla’s appeal here is obvious. So is that of the Kwid over there, where for $4000 you can also buy a piece of the future. It won’t have the Model 3’s bells and whistles, but it will have a lot of things you haven’t seen before, at a price you can afford.
And there’s nothing more disruptive than that.
Coming in Part 3 of my journey around the world to investigate the future of transportation: I try to Cannonball a Kwid across India, and see whether self-driving cars will ever work there.
Alex Roy, entrepreneur, President of Europe By Car, Editor-at-Large for The Drive, and author of The Driver, set the 2007 Transcontinental “Cannonball Run” Record in a BMW M5 in 31 hours & 4 minutes, and has set multiple driving records in Europe & the USA in the EV, 3-wheeler & Semi-Autonomous Classes. You can follow him on Facebook,Twitter and Instagram.
MORE TO READ
Tesla Plans to Produce 20,000 Model 3 a Month by December
Tesla’s readies first mass-produced EV for large numbers, will consumers buy into the hype?
First Tesla Model 3 Just Rolled Off the Production Line
Exciting news as Tesla CEO Elon Musk shares photos of first Model 3 off of the assembly line.
Tesla Is Working With the Indian Government to Build and Sell Cars
Tesla is on the road to building its electric cars in India.
Tesla Model 3 Offers Few Early Options
“You just need to decide what color you want and what size wheels—at least for the initial production.”