Renault awaits the new Megane
BY JAMES STANFORD | 2nd Jul 2008
The current European Megane has been a slow-seller in Australia, with Renault struggling to offer a full suite of safety gear and be competitive with Japanese and other non-European rivals.
Now it is looking to the next-generation small hatch to provide the growth it needs to be taken seriously in Australia. Currently, the Megane sold in Australia was developed for Europe and is built in Turkey.
The next-generation Megane will be developed as two separate cars – one for Europe and a cheaper version for the rest of the world. The non-Euro model, which is bound for Australia, will also be produced at a low-cost Renault plant somewhere outside Europe.
While there are several potential locations that could produce the car, India is looming as a favourite, but Turkey may also produce the car. Renault Australia managing director, Rudi Koenig, says his company will take the non- European Megane, but insist that it will have all the safety features of the Euro model.
“By going down the international route there will be differences between the European Megane and the international Megane which we can cherry pick from, which will give us the best-value proposition within Renault DNA,” Mr Koenig said.
He said the next-generation Megane would be able to compete with the most popular models in the small-car class. “If we can sell a car that has all the values of Renault at a Japanese-competitive price point, then there is no reason why we can’t we can’t pick up our volume,” he said.
“The small car market here is worth 200,000 cars a year and we are selling 1000 Meganes, which is nothing. We should be able to double that with a sharper price.”
Mr Koenig said it was not possible to achieve such a price point without sourcing the car from outside Europe.
“(At that price point) you couldn’t bring it out of France with the full monty, it wouldn’t be able to have ESP, full airbags and we are not prepared to do that.” Renault Australia sold just 1116 Meganes last year, which contributed to an overall total of 2909. It is about to receive a major boost with the new Koleos all wheel-drive, which is being built in South Korea as part of a joint-venture with Samsung.
While that car, which is effectively a re-skinned Nissan X-Trail, is expect to be the best-seller in the Renault range in the short-term, it is the Megane that offers a far larger volume opportunity in the longer term.
Renault Australia will not take the Clio light car range, which sits below the Megane in Europe. It says it simply can’t bring the models here at the right price with a reasonable level of equipment.
That position is the reason Australians have had to wait two years for the red-hot Clio RenaultSport model, which goes on sale here late this month.
Renault in France was reluctant to allow its Australian arm to have the sporty RenaultSport model but not sell the mainstream Clio, but a long negotiation finally saw the hot-hatch cleared for sale here.
Mr Koenig said the introduction of the new more affordable Megane, along with the Koleos, would allow Renault Australia to increase its sales by at least 2000 to more than 5000 a year within the next two to three years.
He said such numbers would really allow the niche French brand to boost its presence in the Australian market profitably.
“To be economically viable in this market you need about 5000 to 7000 sales a year. That gives you enough funding to promote your brand effectively because at 3000 you can’t really afford to be on TV or in the newspapers,” he said.