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Renault exec Daniel aims to end the automaker's struggles in China

Jacques Daniel: "A larger crossover is the perfect starting point [for China production]."
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Renault's long-term sales target for China is bold -- 600,000 to 700,000 -- given that the French automaker sold just 32,000 cars there last year. The goal, however, shows just how far behind Renault is in the world's largest market as French rival, PSA/Peugeot-Citroen sold nearly 560,000 vehicles in China last year and Volkswagen Group sold 3.27 million vehicles there in 2013.

Renault has struggled to gain a foothold in China. In 1993, it established a joint venture with a subsidiary of China’s state-owned aerospace technology company, but sales were poor and the partnership stopped making vehicles in 2004. Renault's China growth will continue to be stunted by the country's high import duties until its new greenfield plant begins production in early 2016.

Company veteran Jacques Daniel, who has led Renault's operations in China since February 2013, shared the automaker’s future plans for the market during an interview with Automotive News Europe Editor Luca Ciferri at the recent Beijing auto show.

Renault will soon have local production in China. Could you tell us more?

Last January we began construction of a greenfield plant in Wuhan, Hubei province, with our joint venture partner Dongfeng Motor. Together we are investing the equivalent of 870 million euros and we will commence with an initial capacity of 150,000 units a year. Production will start there at the beginning of 2016.

What will be the new plant’s first car?

It will be a brand new product, a D-segment crossover that Renault will also build in Europe for Europe. Keep in mind that 85 percent of our sales in China currently come from the Koleos compact crossover and 15 percent from the Fluence compact sedan. Looking at the most recent developments in the Chinese market, where SUVs are selling very well, a larger crossover is the perfect starting point.

Renault has said that to speed up its local operations in China it is heavily reliant on alliance Nissan. Is that also true for your new product?

Absolutely. Rather than adding a new platform in China, our crossover will be underpinned by Nissan’s P32 platform [used by the previous-generation Qashqai and X-Trail], which is already localized in China.

Which model will follow the mid-sized crossover?

Most likely a smaller crossover, which will replace the Koleos, which we are currently importing from Renault Samsung Motors in South Korea.

What are Renault’s long-term plans for China?

Our target is to reach 600,000 to 700,000 units a year in the midterm. We have not fixed an exact time period for attaining that, but that it is where we want to be.

How do you expect to reach 600,000 to 700,000 sales a year with just 150,000 units in installed capacity?

The Wuhan plan is designed to be easily doubled to 300,000 units, but clearly over time we will need to add more local capacity to reach our midterm target. In addition, at a later stage, our DRAC [Dongfeng Renault Automotive Co.] joint venture will also introduce a range of products under a local brand.

Meet the China boss
NAME: Jacques Daniel
TITLE: Renault Senior Vice President for China
AGE: 53
MAIN CHALLENGE: Finally establishing Renault as a relevant player in the world's largest auto market.

Which models imported into China will you add to your lineup and when?

Our 265-hp Megane R.S., one of the fastest compact cars in the world, will launch here later this year. Our highly successful small crossover, the Captur, will be imported to China next year.

How many dealers do you have now and what is the future target?

We had 92 dealers last year. We plan to increase that to 120 by 2016.

How confident are you that Renault will remain a key partner for Dongfeng considering that it is now one of the three main shareholders of PSA? Is there a risk that Dongfeng will downgrade its partnership with Renault?

I can honestly say that so far we have seen no sign, not even a tentative one, that this might occur.

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You can reach Luca Ciferri at lciferri@crain.com.

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