PARIS - Renault, the only European volume carmaker with just one brand, is moving toward a multi-brand strategy.
The first step is likely to be the takeover of Romanian carmaker Dacia. But Renault also wants to strengthen and expand the Renault Sport brand with new models and is considering a revival of the Alpine sports car name.
Renault earlier this month handed over its offer for Dacia to Romania's privatization commission. It is the only takeover candidate to do so. The 51 percent stake in Dacia owned by the Romanian state is valued at $135 million by the commission.
Renault Chairman Louis Schweitzer is expected to sign a letter of intent with the Romanian government and the privatization commission in the near future. A memorandum of understanding will follow later in 1999.
Schweitzer wants Dacia to produce a $6,000 car and lead the company's move into low-price segments in emerging markets.
'Dacia's current cars sell for between $3,000 and $4,000,' said Manuel Gomez, vice president for international operations. 'And 30 percent of Dacia managers speak French.'
Dacia's 28,000 workers produce a derivative of the Renault 12. About 90,000 units are built a year. The antiquated Pitesti plants, 100km north of Bucharest, make two- and three-box, wagon and pickup versions of the car.
Renault's first priorities at Dacia would be to reduce costs and improve plant organization and quality.
'Current Dacia models do not last more than 80,000km,' said a Renault engineer.
Dacia's management has said the plants need an immediate $300 million investment to reach modern manufacturing standards.
'It's only after this investment that Dacia will be able to launch a new model under a second brand - and that won't be before 2004,' a Renault source said.
A feasibility study for the $6,000 vehicle has already been launched by Renault.
'This vehicle could be manufactured in Romania, but also in Russia and Brazil,' said Georges Douin, executive vice president in charge of product planning and international operations. 'To make it profitable, production should be at least 250,000 units a year.'
In Brazil, the vehicle could undercut the dominant 1.0-liter populares models that sell for between $6,700 and $10,000.
Meanwhile, Renault is looking for ways to strengthen its sport image. One way it could do this would be to use its Renault Sport name as a vehicle badge.
'Renault Sport could become a fully developed brand,' said Christian Contzen, Renault Sport vice president. 'There is room for niche products or derivatives of mass-volume models.'
Until 1997, Renault Sport's main activity was making the V-10 engine for Formula One racing.
'Renault Sport used to be a cost center,' said Contzen. 'But now we want to make it a profit center to ensure its autonomy.'
There is already a model branded 1/8Sport' in Renault's range: the Spider that is built at the Dieppe plant. Around 1,500 units of the FF200,000 ($35,320) two-seater have been sold since its launch in 1996.
Two new models are likely to join the Sport range. The first, due next year, will be a derivative of the Clio supermini. Called Clio RS - for Renault Sport - it will be powered by a 2.0-liter engine.
The second model is still waiting for production approval. It would be a passenger-car version of the Clio Trophy race car, powered by a V-6 engine.
Reviving Alpine would be more ambitious. Created during the 1950s, Alpine cars won the world rally championship and the Le Mans 24-hour race in the 1970s. But the brand disappeared in 1994 with the last A610.
Some Renault managers suggested the Alpine name should be relaunched with the Spider, but the plan was abandoned. Now there's renewed interest in a revival.
'We wouldn't make the same mistakes with Alpine this time that we made with the A610,' said a Renault insider. 'Then we claimed that the A610 was a competitor to Porsche. But we might think of using Alpine for a trendy, sports coupe like the Audi TT.'