CURITIBA, Brazil - Renault wants to capture 10 percent of the Brazilian market - an estimated 200,000 units - by 2005, in spite of the economic difficulties that have swept the country. In 1998, Renault is expected to take a 1.3 percent market share. Its sales will double from 9,500 in 1997.
In the first nine months of 1998, Volkswagen held 29.7 percent of the Brazilian market, followed by Fiat (24.4 percent), GM (23 percent) and Ford (13 percent.)
Brazil's economic troubles have had a serious impact. Sales fell by 22.5 percent in the 11 months from January to November, compared with the same period in 1997.
'The Brazilian market reached 1.9 million units last year, but it should go down to 1.5 million this year,' said Luc-Alexandre Menard, general manager of Renault's Mercosur division. Renault has cut its 1999 production forecast at the new plant from 40,000 to 30,000 units.
But Menard and his team remain optimistic for the future.
'We aim to achieve a 2.6 percent share in 1999, rising gradually before reaching 10 percent in 2005,' said Gilles Normand, Mercosur sales coordinator. He expects 40,000 sales in 1999, rising to 80,000 in 2000 and 120,000 in 2001.
'We think that the Brazilian market will grow from the bottom. Therefore, we'll need a $5,000-$6,000 car,' said Menard. As part of this strategy, Renault is expected to take over Dacia, the Romanian automaker. Dacia should act as Renault's entry level brand for emerging markets around 2003.
When the Scenic is launched in Brazil next February, it will cost between $29,900 and $35,800.
'We think we can be successful in Brazil by making ourselves different from the four current leaders,' said Patrick Faure, Renault's truck division chief executive and former sales vice president.
'With the Scenic, we want to build an image of innovation. The car will be priced and marketed as an upper-medium range model,' said Laurent Bernard, Mercosur division product planning manager.
But Renault's volume sales will come from smaller cars, called populares in Brazil. 'We eventually target a 55-45 split between populares and our other cars,' said Menard. 'We will offer three populares models: The Twingo (assembled in Uruguay), Kangoo (made in Cordoba, Argentina) and Clio. But they will be more highly equipped than our competitors' cars.'