Renault renews Australian commitment – again

AUSTRALIA’S first five-year warranty from a European brand, the launch of Renault Financial Services and the French brand’s all-new Latitude luxury flagship have emerged as the major planks of stage two of Renault’s latest Australian expansion plan.

Matching the best new-vehicle manufacturer warranties from Australia’s mainstream automotive brands, the five-year/unlimited mileage warranty for most of Renault’s passenger car range was revealed at this week’s media launch of the Latitude large sedan, which is now on sale with a lower than expected starting price of just $36,990.

The Latitude is the sixth new Renault model to be released in Australia in the past six months, following the local introduction of redesigned Megane hatchback, coupe-convertible and (RenaultSport 250) coupe models in October, the all-new small Kangoo van in December and the small Fluence sedan, upgraded Trafic medium van and light-sized Clio RS200 Australian Grand Prix limited-edition hot hatch last month.

The new and more keenly priced Megane models – including the closely related Fluence sedan, which like the larger Latitude and compact Koleos SUV is produced in South Korea – are expected to account for almost two-thirds of Renault sales.

Rather than being charged with attracting significantly more customers than the slow-selling Laguna it replaces, Renault says the Latitude will act as a halo model for its rejuvenated model range, which was forecast to find about 2300 new homes last year but fell more than 20 per cent short at 1907.

However, sales are up by almost 25 per cent after the first quarter of this year and new Renault Australia managing director Justin Hocevar told GoAuto this week that the fledgling French brand remains on target to achieve its 2011 goal of up to 3500 sales, which would be its best result since 2002.

Of course, that is substantially lower than the ambitious long-term goal of 20,000 sales Renault forecast when it invested $60 million relaunching itself under Nissan Australia stewardship more than a decade ago in May 2001, when it planned to become the nation’s number one European brand – as well as the more conservative 7000 target revealed for 2011 in mid-2006.

However, Mr Hocevar said Renault’s five-year warranty would play a vital role in the brand’s sales aspirations by underlining its commitment to the Australian market and debunking what he described as the myth surrounding Renault reliability.

“Renault will be the first European brand with a five-year manufacturer warranty,” he told GoAuto on Monday (April 11).

“We’ve monitored the customer running rate since we’ve been under the Renault-Nissan Alliance and there’s no reason why we can’t do this.

“We know the brand carries forward some stigma from the past and we don’t think that’s justified. I think it really helps with the myth-busting surrounding Renault’s reliability and it sends a vote of confidence in the brand.



From top: Renault Megane RS250, Renault Fluence, Renault Koleos, Renault Kangoo, Renault Captur concept.

“We’re really serious about our commitment to the Australian automotive public and I think this is a great move for our passenger cars.” Funded wholly by Renault Australia and introduced following a 50 per cent reduction in warranty costs by Renault SpA – Europe’s second-largest car-maker – the five-year/unlimited-kilometre warranty applies to all Renault passenger cars, includes five years of free roadside assistance and will be applied retrospectively from April 1.

However, the more generous warranty excludes the RenaultSport (Clio and Megane) hot-hatch range, which like the large Trafic and Master commercial vans will continue with a three-year/100,000km warranty, while Renault’s small Kangoo van will continue with a three-year/150,000km warranty.

“It’s going to be on all of our passenger vehicles, but it’s not touching our RenaultSport range because the RS cars already have a very competitive warranty in their segments – as do our LCVs, for which some of our competitors only have a 100,000km warranty,” said Mr Hocevar.

Renault’s new warranty, which extends its current passenger car guarantee by two years, matches that of Hyundai (which also warrants its commercial vehicles for five years/160,000km) and Kia, which backs commercial, fleet, government and rental vehicle purchases with a five-year/130,000km warranty.

Meantime, Mitsubishi’s five-year warranty for all vehicles is limited to 130,000km but comes with a 10-year/160,000km powertrain warranty, while Lexus is the best of Australia’s luxury brands with a four-year/100,000km warranty.

While its longer new-car warranty comes as a surprise, Renault hinted at the Sydney motor show that it planned to introduce a retail finance program, which it also announced this week.

“We’ve come good on that one as well,” said Mr Hocevar, the former national manager for Mini who replaced long-time Renault/Nissan Australia executive Rudi Koenig in September last year.

“Renault Financial Services will be part of Nissan Financial Services – they’re obviously writing the paper on our behalf but it’s completely independently branded, it’s got its own dealer contracts, agreements, funding processes and so on.

“We believe both initiatives continue to help get positive messages out there into the market about the Renault brand.

“We’ve launched a lot of new models in the last six months – six now including the Latitude – and have now introduced to the market a fully fledged demonstrator program and a fully fledged service-demonstrator vehicle program in the dealer network.” Mr Hocevar said Renault also hoped to introduce a fixed-price service program like those offered by many mainstream brands and Renault’s own Koleos, but was yet to institute an approved used-car program – the other initiative Renault promised at last year’s Sydney show – and concedes more needs to be done in terms of brand perception.

“We’ve already got a service-inclusive package in the market with Koleos and that’s been working really well,” he said. “We’ve been running it as a factory incentive for the past couple of months and certainly it’s our intention to roll that package out as an available option across a number of models.

“So we’ve already done a lot of the work there and we’re well on our way with having service-inclusive packages available for more of our models.

“We’ve also launched a five-year warranty and Renault Financial Services but I think there’s still plenty to do. It seems to be never-ending and we’ve still got a long way to go in terms of our brand communications.

“It’s funny – the impression that I had of people’s perception of the brand was one that was perhaps a little negative but we’ve actually found that’s not the case – it was just a kind of indifference due to lack of awareness.

“We had a really strong presence at the Formula One Grand Prix. We really leveraged the fact we’re deeply involved in F1 by holding a vehicle prize promotion that attracted some 25,000 completely new people to our data base.

“We’re gunning for mid-3000s this year. We really would like to get to the 3400-3500 unit mark – that’s what we’re gunning for and we’re running on track for the year.” Mr Hocevar said Renault’s new ‘drive the Change’ advertising slogan – and its drive to reach 3500 sales in 2011 – was already being aided by the new Megane hatch, which is sourced from Turkey and priced from a more competitive $22,990, and the Megane coupe “We’ve certainly been leveraging the prominence of Megane, in particular the RS250, which is obviously a vehicle that’s won a lot of accolades,” said Mr Hocevar.

“Our full-year sales projection is almost double what our budget was for that car. I think that’s helping the Megane nameplate as a whole, because our enquiry levels are up something like 500 per cent – we’ve had record levels of enquiry.

“Our test drives year-to-date were running at about 170 per cent up on last year. They’re still low numbers and it’s coming off a low base but 259 units in March is well up on last year.” Megane sales were up 22 per cent last year and have staged a 125 per cent sales spike so far in 2011, but the Megane-based Fluence – which replaced the superseded Megane sedan – has attracted just 120 sales in its six months on sale.

Both models are now being supported by a new print and outdoor advertising campaign, which will soon be extended to include to a new animated television commercial produced by Animal Logic.

Mr Hocevar said Renault did not have high sales expectations for the two-variant, two-engine Latitude line-up, which is powered by a Nissan-sourced petrol engine that may be restricted in supply this year, but that the top-shelf Luxe variant would account for up to 70 per cent of sales, with diesels comprising up to 40 per cent.

“For us the Latitude is really a showcase flagship to help us demonstrate that, yes, we do hot hatches in RenaultSport and we have a number of mainstream hatchbacks, but the Renault brand also has the style, substance and equipment levels of a European brand.

“Obviously we’re launching our new flagship at a value proposition in terms of the fact it’s priced in the medium car market up against Honda Accord and Mazda6 and various other competitors there, but from a size perspective it fits into the large car market because it’s really the size of a 5 Series.

“So we’re going to hit the segment with a pretty compelling offer. (But) we’re not really expecting to do much more than equivalent to higher sales than we did with Laguna – we’re talking a couple of hundred (a year).” Renault sales will be further bolstered later this year with the arrival of diesel-powered Megane models and the all-new large Master van range in late 2011.

Mr Hocevar said that if Renault’s futuristic Captur compact SUV concept morphed into reality that he “would obviously explore an opportunity like that”.

But he ruled out a Renault Australia version of the upper-large Samsung SM7 sedan shown at the recent Seoul motor show. Unlike the Latitude, which is based on Renault Samsung Motors’ SM5 sedan, the SM7 will not be produced in right-hand drive – or Renault – guise.

Renault Australia this week also announced the appointment of a dealer network development manager in former Toyota, VW, Hyundai and Deloitte executive John Whalley, who will report directly to Mr Hocevar.

The appointment of Mr Whalley, who will be responsible for developing Renault’s Australia’s retail network, which currently comprises 22 dealers, follows the replacement of about 40 per cent of Renault’s Australian staff and the recent refurbishment of its head office on the ground floor of Nissan Australia’s HQ in Dandenong, Victoria.