UK MD Roland Bouchara spoke to Car Dealer as the company unveiled the all-new Megane – a model it sees as vital in its plans to arrest declining UK volumes. Since we spoke, they’ve emerged to be down by more than half in October.
Overall, the maker is down by around a quarter on 2007 levels, a situation Bouchara describes as ‘tough’.
‘The top segment is declining faster than smaller ones,’ he said. The weak pound is also an issue for car makers. This means it is costing Renault more to import its cars.
To counter all this, Renault is pinning its hopes on the new Megane, which arrives in the UK later this month. The company has big aims for the new car, which the MD says is its best-quality-ever car.
But there’s more. The new Scenic is also due next June. The Laguna Coupe will be a halo-effect fillip. Then there’s the expanding Kangoo range, too. All should help Renault’s new aim – to improve on its market share in this shrinking market.
That’s not all Renault is doing to help dealers, though, as Bouchara explained.
The company has taken measures to reduce distribution costs, for example, to boost dealer profitability. Earlier in the year, an initiative called ‘Renault Twenty’ was introduced. ‘The objective here was to cut costs.
‘Actions were taken on both sides – for example, reducing non-productive takes, reducing the number of demonstrators and reducing tacticals. These have all helped to increase cashflow.
‘The network must be profitable.’
Better quality cars is also a help. ‘Warranty work has decreased, which means there can be more retail business in the workshops. This is more profitable – and is a direct consequence of our improved quality.’
So Renault isn’t tempted to earmark daily rental to keep sales ticking over? ‘No!’ says Bouchara, with fervour.’ The company, it seems, has intentionally been pulling out of such high-churn markets for some time now, in the interests of protecting residuals. Even if it has taken a volume hit as a consequence.
‘Renault is healthy now. Look at our stock levels: they’re at the correct levels. The market is decreasing, and the last thing we want is overstocking.
This means there’s less price negotiation, fewer tacticals – but, as we’ve lost market share, our retained values have moved up.’
‘Stock level is a fundamental (to get right). In this market, our aim is to increase market share. So far, we’ve met our expectations.’
All eyes on the new Megane, then. A sales fall of over 53 per cent year-on-year means it’s impossible to overstate how important the car is rapidly becoming…
By RICHARD AUCOCK