Renault sees high growth potential for its low-cost cars
Arnaud Deboeuf, head of Renault's entry-range program: "We feel that our experience in this field gives us a competitive edge."
Renault's entry-level range of vehicles is enjoying success as customers hit by the economic crisis turn to low-cost cars. The automaker aims to sell more than 1 million cars this year based on the low-cost M0 platform, including models such as the Logan sedan, Sandero hatchback, Duster SUV and Lodgy minivan. Arnaud Deboeuf, the head of Renault's entry-range program, talked about the plans with Automotive News Europe Correspondent Bertrand Gay.
How has Renault's entry range performed during the first half of the year?
We sold 457,000 entry-level vehicles under our two brands, Renault and Dacia, which is 16 percent higher than in the same period last year. We achieved a worldwide market share, excluding North America, of 1.39 percent. The mix between our two brands is 60 percent for Renault and 40 percent for Dacia.
Which are the best markets for you entry-level cars?
Our Americas region is where sales are strongest, up 28 percent in the first half. The Duster is a success in Colombia and Argentina, as well as in Brazil. During the first six months, we had an 8 percent sales drop in Europe, but that was before the Lodgy and Dokker [car-derived van] were able to offer their full contribution. Sales grew 21 percent in Euromed, 28 percent in Eurasia and 34 percent in Asia Pacific. We feel that our regional mix is well-balanced.
How will sales be during the second half?
We feel that we will be able to achieve higher sales than in 2011 in all our regions, even in Europe. We will sell 1 million vehicles based on our entry-program M0 platform this year under the Renault and Dacia brands, up from 813,000 last year. If you add a few Nissans and the start of the production of the Lada Largus at Togliatti in Russia, the 1 million figure will be easily surpassed for the platform.
What new products are coming?
We are showing new generations of the Logan and Sandero at the Paris auto show in September. It's a new step for us, especially as styling is concerned. When we launched the Logan in 2004, the expansion into new variants was done in steps. This time, everything is well planned. We are entering a new era with the renewal of our entry range. With the launch last spring of the Lodgy and Dokker, we entered two new segments.
What will be the pillars of this new generation of vehicles?
We feel that our experience in this field gives us a competitive edge. We have learned a lot in the eight years since the Logan launch. From the Sandero to the Duster, we managed to improve the mechanical aspects. We reduced weight and lowered fuel consumption on the K9 diesel engine. We have resolved problems step by step in a strict cost environment. On the new-generation cars, we want to offer more style and more content for the same price. But we will remain true to Dacia's basic goal: a no-frills, practical car.
How will the new cars be styled?
The new style is about robustness, status and usable space at the right price. You will see it on the new Logan and Sandero at the Paris show.
Will you expand production, possibly with new factories?
We are discussing new locations right now. Southeast Asia is a major market where we are not active at the moment. Currently, our entry range vehicles are built in 11 factories around the world and the range has expanded to seven vehicles from one in eight years. Production of the Duster SUV has just started at Nissan's plant in Chennai, India. Right-hand-drive production in Chennai allows us to export the Duster to the UK and Ireland. The Duster is the first Dacia product we are selling in those two countries.
Is Renault's business with Iran affected by U.S. and European trade sanctions against the country?
We sold more than 53,000 vehicles in Iran during the first half of the year. That's an improvement of 53 percent and it gives us more than 8 percent market share there. Iran now ranks as the ninth most important market for the Renault group. We have no problems in Iran since we have a local subsidiary, Renault Pars. We've been checking everything with the French authorities and they are OK with it, but it's sometimes difficult for some of our suppliers.
How are sales in Brazil developing?
The market slowed down a little while buyers waited for some sales-support measures from the government. Now that everything is in place, the market has gone up. We have increased the rate of production at our factory in Curitiba to 60 cars per hour from 47.
Are your entry-level cars adapted for different markets?
The entry-program architecture is technically very flexible, so we have achieved maximum customization of the vehicles when we felt it was needed. In Brazil, the Duster has higher trims and a specific dashboard with a double DIN-sized radio. In India, on the Duster, we have changed the angle of the back seat to give it more comfort and added a second climate control unit at the rear, as well as two reading lights. Being able to fine-tune the characteristics is an important part of the edge we have over our competitors.
You can reach Bertrand Gay at email@example.com.