A reality check for Renault in the UKby Andrew Frankel on 20th December 2011
Renault has announced it is taking a chainsaw to its UK operations, cutting back its dealer network by a third and removing from sale cars including the Espace and Modus MPVs, the entire Laguna range, the Wind Roadster and Kangoo passenger van.
A spokesperson put this down to two reasons: the economic crisis and the weakness of the pound relative to the euro.
There is a third reason she did not mention, but which explains perhaps better than any other why Renault’s market share in the UK has more than halved over the last decade: its cars just aren’t good enough. Actually the Kangoo (above) is not bad at all, but finding a reason to recommend the rest over the competition was becoming borderline impossible.
When times are good, it has often been enough for car manufacturers to design mediocre cars with no outstanding attributes and trust the marketing boys to find homes for them. But when things are as tough as they are now, people see through the slickness very easily. And if a car cannot provide a single reason for a purchaser to think ‘this is why I should spend that many thousands of pounds on this product in preference to any other I could find in the market’, it will find the ground gives way beneath it.
This is the art the Koreans have mastered: first they made their cars cheap, then they loaded them with goodies. Next they extended their warranties and soon, if they continue on their current trajectory, at least some will lead their classes on true merit. Through thick and thin, they have given the customer a reason to buy.
Of course we should be sorry this situation at Renault has arisen and I am, but only in part and largely for those who, quite tragically, will go into Christmas knowing they’re out of a job. But am I sad that a substantial number of not very impressive cars have been removed from the sales charts? Not in the least.
Besides it can at least be hoped that Renault’s strategy of cutting its greatest loss-makers from the UK line-up (there is no indication as yet of similar cuts in mainland Europe) will leave space for a raft of new and potentially interesting cars into the UK in 2012.
Most important will be the new Clio, a car that in the age of downsizing is clearly more critical than ever: its importance to Renault in general and the health of its decimated UK operation in particular would be hard to overestimate. And then there are the three electric cars, the Twizy, Fluence (below) and Zoe. I love the Twizy quadricycle but think the market will be small because of the lack of a charging infrastructure. However I remain to be convinced by the likely market appeal of the Fluence, an ugly C-segment saloon – a breed of car that has never sold well in the UK even with conventional rather than battery power. The Zoe, though, is something else – small and very cute. If Renault can keep the price down and if the Government can keep up its £5000 electric vehicle grant, it could be the world’s first truly cool and affordable electric car – and that’s a reason to buy it.
But I expect the car that will do most to get Renault through its sticky patch isn’t a Renault at all. It’s a Dacia Duster (below). Laugh all you like at the name, but the new Duster from Renault-owned Dacia is no joke: it’s been selling out all over Europe, made the seven-strong shortlist for 2011 Car of the Year and has only not been seen here thanks to demand being so high there was no capacity to build right-hand-drive models. A compact SUV with proven Renault mechanics, it’s a simple, effective, honest and timely product that at around £10,000 should sell in large quantities without, crucially, stealing sales from other Renaults.
In response to its announcement Renault has received something of a kicking from armchair executives who think selling cars for a loss a better idea than not selling cars. To me the cutting of its ranges and the extension of its warranties to four years or 100,000 miles is symptomatic of a new and much needed sense of realism sweeping through the company. If Renault in the UK is to survive the economic crisis, the threat from the East, its unedifying current product line-up and, yes, even the weakness of Sterling, this is how it must start.
And it is not alone: Renault may be the first to take such radical action, but I very much doubt it will be the last.