11 September 2007

What's Up At Renault?

As late as 2004, Renault was king of Western Europe; numero uno. It sold 1.5 m cars, 50,000 more than it's nearest rival. This year, it will sell a little over 1 m cars, down nearly a third. Market share will have fallen from 10.5% to about 7.5-8%. It will be only the fourth ranked car brand. Why? It seems many manufacturers are price driven rather than product driven. In other words, sales success is due to discounting, especially to fleet buyers. It looks good on paper, but isn't very profitable. However, if the product is good enough, that will propel sales in its own right. Maybe not to fleet buyers but to private buyers.

In other words, not as many sales, but more profitable ones. Renault needs to make cars people want to buy, and paying a reasonable price for the privilege. So you can't judge a car company's success by how many cars it sells, but how profitable it is. In this, it seems Renault is going in the right direction.

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