[JayPrashanth]

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Many Renault India dealers across the country have begun taking bookings for the base RxE variant of the Scala Diesel sedan. Team-Bhp touched base with one such dealer in Bangalore, who confirmed this news and even gave us a few details about the car. For the record, the Renault India website is yet to see an update with the new RxE Diesel variant's price although the variant is listed. Expect the official announcement to arrive in the next few days.



Previously, the diesel powered version of the Renault Scala sedan was available only in two variants: RxL and RxZ. Similarly, the petrol variant of the Scala was available only in RxE and RxL trims. The main reason underlying Renault's approach of launching limited variants of the Scala was to prevent competing directly against the Nissan Sunny sedan, a car with which the Renault Scala shares most of its parts. The Renault Scala is essentially a badge engineered version of the Sunny. Styling and pricing apart, there's little to differentiate between two cars.


Now though, the introduction of the Scala Diesel in RxE trim narrows down the price differential between the Renault Scala and the Nissan Sunny. For instance, while the base RxE variant of the Renault Scala Diesel costs 8.29 lakh rupees, ex-showroom Delhi, the mid XL variant of the Nissan Sunny Diesel(Note that the base Sunny Diesel variant has been discontinued) is priced at 8.30 lakh rupees, ex-showroom Delhi. At these pricing levels, the only difference between the RxE variant of the Scala Diesel and the XL variant of the Sunny Diesel is centered around the equipment on offer. The Sunny XL continues to offer more equipment at a lower price tag than the Scala XE, in keeping with the positioning of Nissan and Renault at the market place.

The Renault Scala Diesel is powered by a 1.5 Liter K9K turbo diesel engine outputting 85 Bhp of peak power and 200 Nm of peak torque. The responsive and frugal turbo diesel engine is mated to a 5 speed manual gearbox as standard. Renault offers a CVT automatic gearbox only on the petrol powered versions of the Scala, which get a 1.5 Liter petrol engine outputting 99 Bhp-134 Nm. Notably, the Scala Diesel in RxE trim seems to have been launched mainly to attract buyers to Renault showrooms than actually selling the base diesel variant of the car. Here's a small excerpt of the conversation Team-Bhp had with a Renault dealership salesman,

Team-Bhp: We've heard that the Scala is available in the base RxE trim.
Renault Dealership Salesman: Oh yes, that's true.

Team-Bhp: So, what are the features that have been omitted from the base variant.

Renault Dealership Salesman: Passenger side airbag, ABS, EBD, Automatic Climate Control, Alloy Wheels and Electric Wing Mirrors. Basically, the RxE Diesel is in the same trim level as the RxE petrol.

Team-Bhp: Alright, and what would the on-road price of the Scala RxE Diesel be?

Renault Dealership Salesman: I can offer you an on road Bangalore price of about 10 lakh rupees. But instead of the Scala RxE, I suggest that you go for the RxL Diesel. On road price is about 10.65 lakh rupees. I can offer you free insurance of about 22 thousand rupees and a further cash discount of 20,000 rupees. So, for 10.22 lakh rupees, you get Airbags, ABS, EBD, Climate Control plus Alloy Wheels.

Team-Bhp: Why can't I get the same discounts on the Scala RxE Diesel?

Renault Dealership Salesman: We're sorry, there are no discounts since it is brand new variant.

In a nutshell, the above conversation reflects the thought process behind the strategy of car makers launching attractively priced base variants. A base variant, similar to introductory pricing, serves as a carrot to allure the prospective car buyer to the showroom. Usually, most buyers drive out in a higher variant. This is a major reason why stripped out, base variants of cars are a rare sight on roads.

[rajshenoy]

I liked the conversation part so true.

Unlike the Hatchback segment, people going for a million rupee plus typically end up with middle variant as it offers best of both worlds.

Nice move by Renault i guess. I did not know Scala RxL costs 10.22 only. So my guess is Sunny XL will be available sub 10 lakh then.

[soonya]

This is classic 'behavioral economics' as explained by Dan Ariely and the research of Tversky and Kahnman.

It is known that human beings can only compare among two alternatives which are similar .

In an interesting experiment they checked out the preference for actors - say Clooney and Pitt. They found some percentage of people liking each of the actors - say Clooney preferred by 45 percent and Pitt preferred by 55 percent.

They introduced an 'inferior' version of Clooney - a look-alike with some distortion not to the liking of people and tested again.

They found the percentage people preferring Clooney over Pitt increased significantly The moral of the story is that if you want people to select A over B, introduce A- so that people find it easy to compare between A and its look-alike A- and obviously will select A! Comparing different options like A and B increases cognitive load and often many people refrain from the 'brain-draining' task!

Smart move

[INNOVATOR]

I really did not get the context or message that your post was trying to convey. Could you please elaborate. Are you suggesting that that it was smart of Renault to have launched a lower trim and it would increase overall Renault sales. The basis of this argument may be questionable given that each manufacturer has multiple trims of every launch - to say that this is to increase overall sales of the higher trim as well may be a little over-the-top. I would definitely concede that it may translate into higher numbers because of the lower price-point increasing showroom foot-falls.
Comparing A & B may certainly increase the cognitive load, but that I would think, is the basic nature of the consumer to compare various data-points including price, features and such before putting up the dough.

[JayPrashanth]

Originally Posted by soonya

This is classic 'behavioral economics' as explained by Dan Ariely and the research of Tversky and Kahnman.

It is known that human beings can only compare among two alternatives which are similar .

In an interesting experiment they checked out the preference for actors - say Clooney and Pitt. They found some percentage of people liking each of the actors - say Clooney preferred by 45 percent and Pitt preferred by 55 percent.

They introduced an 'inferior' version of Clooney - a look-alike with some distortion not to the liking of people and tested again.

They found the percentage people preferring Clooney over Pitt increased significantly The moral of the story is that if you want people to select A over B, introduce A- so that people find it easy to compare between A and its look-alike A- and obviously will select A! Comparing different options like A and B increases cognitive load and often many people refrain from the 'brain-draining' task!

Smart move

With the risk of going slightly off topic here, Prof Ariely(in Predictably Irrational) also explains a case study through which he suggests that while dating, a person with better looks gets chosen first. Prof Ariely adds that while going out for speed dating, etc, it's better that you take a slightly worse looking person than yourself as your partner. This usually means that your chance of getting picked up is better as the person interested in you will feel better about you while decision making as there's a ready means of comparison available. Many find the Scala a little more masculine than the Sunny. So, a similar price point could tilt the scale the Scala's way if the decision making boils down to looks.

Cheers,

Jay

[AbelAFC]

Wow car manufacturers these days employ some serious economic principles. I'm reading a book called Freakonomics, the same kind of thing is discussed there.

[soonya]

@ Innovator

Since the earlier post was comparing two versions an 'inferior' version and a 'superior' version though at different price points, the desirability might shift to the latter.

Ariely delves deep into many of our choices which seem 'irrational' having their own logic and those that sound very rational after a little deeper peep may not be so.

Apparently here there were only two versions/options earlier - RxL and RxZ, by adding an RxE the RxL looks more attractive. I was making a conjecture that Renault in this case probably was trying to push RxL by introducing RxE and I presumed someone from Renault marketing would have read Ariely We'll have to wait and watch if the RxL share of sales go up.

I presumed that the potential customer who came to buy Scala in this case almost completed his/her 'extensive problem solving' of evaluating multiple brands/type of car etc., before coming to the showroom and is evaluating between the two options. But with a third one in place the choice making might be that much easier or less taxing.

If car buying was purely rational one should be buying Nissan since there seems to be no significant difference except for some differently bent metal (purely non-emotional way of looking at things).

That was what I was alluding to.

Agree with you that with a 'loss leader' type version a company tries to attract more footfalls and hopes that the consumer ends up buying a better 'specced' product or more expensive one which return better profits to them.

In any case too many versions also confuse the consumers and some may move away to another brand/product or might postpone their decision unable to deal with the 'cognitive dissonance' as I understand.

@ Jay

Well Ariely has published the book about 25 years too late to date