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Renault rebuilds in Australia

Turkish delight: Australian-delivered Megane hatches will be produced in Turkey to minimise costs and maximise value-for-money.

Renault relaunches with new models, value focus and fresh management team

1 Nov 2010

RENAULT has embarked on a fresh course to increase sales in Australia, this time with modest ambitions but a new management team and a more expansive model range, including hatchback, coupe-cabriolet and high-performance Renault Sport versions of its Megane small-car range.

Launched in Melbourne last week after their debut at the Australian International Motor Show in Sydney last month, the broader and more value-oriented Renault portfolio – which includes the Fluence small sedan and early next year will contain the Latitude mid-sizer – is designed to rebuild the French brand’s sales from around 2300 this year to 3500 in 2011, with the rejuvenated Megane line-up and the related Fluence accounting for almost two-thirds of sales.

 center imageFrom top: Renault Clio RS200 Cup, Renault Fluence, Fenault Megane RS250 Cup Trophee, Renault Latitude, Renault Koleos, Renault Australia managing director Justin Hocevar.

Of course, this is a long way from the 20,000-plus annual sales Renault’s previous management predicted when it returned to Australia in 2001, and only half of the far more conservative 7000 it set as its 2011 target back in mid-2006.

Despite the new-vehicle market returning to form after the global financial crisis and being poised to again surpass one million sales this year, Renault is still struggling, down 30.1 per cent to the end of September with just 1310 new registrations across 10 model lines.

Under new managing director Justin Hocevar, who is best known as the former national manager for BMW’s Mini brand, Renault Australia is working under the slogan ‘Drive the Change’ and has announced an unspecified “significant investment” from head office in France “that will deliver the Renault brand long-term status as a key player in the Australian automotive market”.

Mr Hocevar told GoAuto last week that three separate elements – product, network and organisation – in equal measure, were necessary for Renault to achieve the kind of presence in Australia it has not enjoyed since the heyday of the Renault 16 and 12 models more than 30 years ago.

“We are coming off a low base,” said Mr Hocevar. “It’s time to change.” He added that the changes he is promising are “budgeted, approved, and will happen” – and identified Renault’s retail network of around 21 dealers as one of its biggest challenges.

Having borne the brunt of problems such as model launch delays, limited supplies, polarising designs on certain vehicles and a lack of volume-selling cars (often due to exchange rate difficulties), Renault’s Australian dealer network is, according to Mr Hocevar, keen to move forward.

“We will have a minimum standard for dealers,” he said. “We will reward them for being good dealers. We are not using a big stick, but a big carrot.” Renault plans to increase dealer numbers, but not on the scale it was anticipating a few years earlier, when it was targeting 45 retail outlets by 2010.

Asked to explain why the $60 million relaunch campaign in the early noughties failed to work, Mr Hocevar reached for a paper serviette and started drawing a diagram.

“The way I viewed that is that you can spend millions of dollars above the line,” he said, likening the process to pouring money into the top of a funnel. “A lot is wasted.” He said that when customers visited Renault dealerships, what they saw and experienced did not relate to the advertising campaign.

“Were they dealt with properly? Were they followed up in a customer relationship management process?” he asked.

Among the new initiatives to be instituted under Mr Hocevar will be a retail finance program and Renault-approved used cars.

He also hopes to introduce a service-inclusive offer, noting the appeal of the $130 fixed service price on Toyota Corollas, but not claiming to plan on equalling it.

More new product is coming, too, including an overhauled light commercial vehicle range comprising the long-awaited new-generation Kangoo compact van and an upgraded Trafic mid-size van – both due for release soon – and an overhauled Master large van and cab-chassis range scheduled for launch in the first half of 2011.

There is a diesel engine for Megane in the pipeline, while the Latitude will, like the Fluence and the Koleos compact SUV, be built in South Korea as part of its joint-venture operations with Samsung.

The Megane hatch is also better positioned than ever before, with a starting price of $22,990, thanks to Australian-destination vehicles being produced from another lower-cost country – Turkey.

As GoAuto reported last month, the Laguna-replacing Latitude will be offered with petrol and diesel power and should start from below $40,000 in Privilege trim, with a Privilege Luxe – with premium features including a double-glass sunroof and heated massaging front seats – starting from just over that mark.

In his Sydney motor show address, Mr Hocevar said: “We are confident our improved product substance will resonate most strongly with customers, especially as it is offered at such an attainable price.

“We are sure this will pitch Renault straight onto the shopping list of all customers who are seeking a refreshing change to their motoring style in Australia.

“When customers consider our European style and design, the feature list, safety systems and our excellent comfort, ride and driving experience and add to this the new, very competitive pricing, Renault will clearly emerge on top.” It is still early days, though. After 12 years with the BMW Group, Mr Hocevar has been in the job for five weeks while another BMW veteran, Chris Brown, has been appointed general manager of marketing, but has yet to assume the role.

When GoAuto asked Mr Hocevar last week what the meaning of Renault is, and what is different about Renault from every other marque, he said “that’s a good question” – and indicated that Mr Brown would be looking at brand identity.

Performance and driving dynamics through its Renault Sport models – which received a fresh boost in recent weeks with the launch of the limited-edition Clio Gordini RS200 Edition – remains an integral part of its brand image. As does safety and European design.

But, crucially, value-for-money could at long last see Renault beating a path behind brands such as Peugeot and Volkswagen, and achieving the sales growth and mainstream acceptance it has long desired but is yet to achieve.

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