Renault looks to 10,000 sales by 2015

RENAULT Australia managing director Justin Hocevar says his company needs to play to its strengths if it wants to reach - and maintain - its target of 10,000 annual sales here by mid-decade.

With the new Clio now rolling into showrooms, and the Clio-based Captur crossover SUV and Clio RS hot hatch both due in the first half of 2014, things continue to look up for the revitalised French car-maker.

Last year it sold 5011 vehicles, a record since its 2001 re-launch and a figure not seen since its 1970s heyday when it manufactured locally. This year, Renault sales are up 41.6 per cent, putting it on track to re-set last year’s benchmark.

Mr Hocevar told us this week 10,000 annual sales was achievable in the relative short-term if the company continued to push those areas where it performed best, but, staying at that level that was the real challenge.

Improvements across the brand, from expanding the dealer network, creating Renault Finance and Insurance, reducing parts prices, adding a longer warranty and capped-price servicing and making strides to improve resale value are all part of a holistic approach outlined by Mr Hocevar to make the sales target sustainable.

“There’s a kind of approach of throwing a lot of money behind media and sales incentives and just getting a short term result,” he told GoAuto. “Renault was never going to get away with a short-term result. Renault has got to go for a longer term, sustainable strategy.

Left: Renault Australia managing director Justin Hocevar.



“There are a couple of volume barriers in the Australian market that are very difficult to break through, and to start with it’s the 10,000 unit barrier,” he said. “That’s something a number of brands have pushed up to before and bounced straight back off.

“I’m focusing on us building there sustainably, not overnight, but over a few years, and once we get to that point we assess and look where we can go to the next level. (10,000) is a target over the next couple of years … we’d like to get to that,” he said.

With the new Clio projected to account for about 2000 sales a year from 2014, and the Captur lobbing into one of Australia’s fastest growing segments from next May (up 16.5 per cent), the job to get to 10,000 sales appears readily achievable.

“I think with Clio and Captur and the building of other models that’s going on, I think we should be able to push up into that territory,” said Mr Hocevar.

“What I’d like to be really good at is B hatch (Clio) and C hatch (Megane), small and medium crossover (Captur and Koleos). That’s our base of cars we’re really good at and can focus on from our point of view, our dealer’s point of view and our market investment point of view.

“They’re two pillars: hatch and SUV. The third pillar is LCV (light commercial vans including Kangoo, Trafic and Master), where we’re increasingly strong, and the fourth is Renault Sport. If we get those pillars right, we’ll be very satisfied.” Maintaining those sorts of volumes comes down to continuing to improve brand perception and, subsequently, resale value, Mr Hocevar said.

Renault now offers a five-year/unlimited kilometre passenger car warranty, three years of capped price servicing, Renault-backed finance and insurance schemes and reduced-cost parts thanks to its tie-in with Nissan’s vast distribution network.

Despite sitting outside those four ‘pillars’, Mr Hocevar said the company would persist with the slow-selling Fluence (120 units this year, down 60.8 per cent) and the Latitude large sedan (200 sales, up 50.4 per cent).

“They give us good market coverage, particularly in the fleet space. Both are largely fleet vehicles. Both C and D sedan segments are highly competitive and it’s hard to compete and make a dollar. But it does mean we have an offer there, and we’ll persist,” he said.

“(Though) I don’t think there’ll ever be high volume there.” Expansion into other segments with cars such as the net-generation Scenic MPV or Twingo mini-car appears less likely, however.

“We’re really mindful to keep that concentration on what we do well,” said Mr Hocevar.

“The big challenge with Scenic is SUVs and crossovers have smashed that segment here, it’s virtually non-existent. Investing in it now just isn’t worthwhile, but if trends change, if there’s a return to people-mover type vehicles, then I think some other people-mover configurations could be an interesting emerging opportunity.

“You’ve got to keep your network focused, if you spread yourself too thing things fall through the gap.” As reported, Renault’s big expansion into LCVs (Trafic sales are up 151 per cent this year, and Master sales have grown 59.8 per cent, with greater growth projected thanks to newly-launched cab chassis and heavyweight bodystyles) has come via sharpened drive-away deals and greater presence on big fleets.

The company notably signed up Australia Post this year - something Mr Hocevar says continues to open doors for the brand.

“I think it’s done a lot of things for us,” he said. “One, it’s done a lot for the confidence of our organisation and our fleet team. A win like that just gives them that added momentum and helps them realise what the potential is.

“Secondly, it has helped our dealer network, made them look at ways to have a more dedicated focus on LCV. It’s such a different business from passenger vehicles that need dedicated people.

“If it’s a tradesperson or someone in transport, it’s not about someone coming and saying they want a van, it’s about someone coming in and saying they need a solution. It’s the person on the other side that can say ‘yep, we’ve got the van’.

“We’ve been receiving calls more so than we’ve been making them. Because they (fleet majors) all talk.”