15 April 2013

There’s a great story in the current issue of Auto Retail Bulletin from one of our contributing editors, Hugh Hunston. It’s all about retailers in the Renault franchise network demanding a minimum 5% market share across their two brands to be viable.

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To be fair, new Renault UK boss, Ken Ramirez, agrees with them and has described the current 2% performance from Renault alone as “plainly unacceptable”. Of course, Dacia sales are yet to come on-stream. But the $64,000 dollar question is: what’s he going to do about it.

He concedes it may take time to recover to previous market shares but then suggests the brand needs to offer “mainstream value” – whatever that may be – and “revived showrooms”. He has even talked of an 8% target. I can hear the collect groan around the network from here.

Renault dealerships have already over-invested. Slashing the number of sales points by one-third was a bold and realistic move that has helped restore some level of profitability by maintaining throughput. Indeed, several other brands could learn the lesson.

At the same time the new Renault Clio is an excellent product that, handled properly, could do much to restore the brand’s image. And Renaults generally remain popular in the used car market – not least because they offer a lot of kit for the money.

So it seems to me that what the network could really do with is a spot of stability. Mr Ramirez is the fourth Renault UK managing director in just over ten years. Of course he wants to make his mark, they all do.

But, rather than ask retailers to invest again or push for volume growth at the expense of profit, his best course would be to continue the strategy of his predecessor – fewer dealerships, tighter model range, less discounting.

Then, when he moves on in three or four years time (which will happen), his legacy could be a profitable business.

Rupert Saunders

Tags: 5% market share, brand management, Dacia, Ken Ramirez, market share, Renault, Retailers