Renault launched a premium compact car in India on Wednesday to challenge rivals such as local leader Maruti Suzuki, becoming the first European automaker to debut an international model in the world's sixth-largest car market.
The Kwid hatchback will go on sale at the end of the year at a starting price of 300,000 rupees ($4,700), and will be made almost wholly in India, Renault said.
Car makers in India, though still struggling with a sluggish rural economy, are increasingly looking to premium compact cars with high-end features to target aspirational consumers who want more than just a cheap ride.
Renault's SUV-like Kwid - aimed at India, the south Asian region and some other emerging markets - comes with an airbag option and navigation functions, neither of which are common in the country's best-selling small cars.
To better compete with rivals like Maruti and Hyundai Motor Co the French company is also extending its dealer network in India, and could almost double its spread to 280 sales outlets by the end of 2016 from the current 157, group chief executive Carlos Ghosn said.
"We know very well that India is one of markets with the highest growth potential," Ghosn said in the southern Indian city of Chennai, India's car manufacturing capital.
"We expect this car to be a game changer for Renault India."
He said both Renault and Nissan Motor, its partner, targeted a 5 percent share of the Indian market, to reach a joint 10 percent, without giving a time frame. Renault's share currently stands at 1.5 percent.
"India is not an easy market. We are learning our way," Ghosn said.
Sales of compact cars are expected to rise to 25 percent of overall light vehicles sales in 2019 from 17 percent in 2010, according to IHS Automotive.