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Exclusive: New models to drive Renault growth

Future star: The new-generation Megane will arrive in hatch guise in September or October and will help lift Renault’s sales in the second half of the year.

Recent rapid sales growth unlikely to continue for Renault in Australia

5 Apr 2016

RENAULT Australia will focus on enhancing its passenger-car line-up as well as ensuring ongoing growth for its successful light-commercial vehicle range in 2016, but it is unlikely to maintain the rapid growth rate it has experienced in recent years.

The French car-maker has been on an upward trajectory in the past decade, increasing its sales from just 3301 units in 2005 to a record 11,525 in 2015, which was a 15 per cent leap over 2014.

This year, Renault sales are up 5.9 per cent after the first quarter, largely due to strong take-up of its Master and Trafic commercial vehicles.

Last year 33 per cent of Renault’s overall tally was for its LCV range that consists of the large Master delivery van, the Kangoo light van and the new-generation Trafic mid-size van that landed in May.

Speaking exclusively with GoAuto, Renault Australia managing director Justin Hocevar said he was “not so concerned” about Renault being viewed as an LCV brand in Australia given the success the company has had with such models.

“I think there has been great emphasis placed on the commercial vehicle business, it has always been a strength of the group,” he said.

“I think it is 18 years straight as the number-one commercial-vehicle seller in Europe. It has clearly worked well for us and our network. I think we have to look at where we are in the lifecycle of our core passenger models as well.”

Mr Hocevar said the focus for the car-maker in 2016 will be on running out old models in preparation for the arrival in the second half of key new models.

“When it comes to passenger, it is going to be a year of two halves for us.

This first half of the year, the Megane and Koleos – there is 40 per cent of the market in those two segments. Both those vehicles are quite old now and therefore we are really looking forward to renewal.

“Runout is going clean on them as well so it’s not as if we have got some sort of opportunity from a supply point of view to have a big push on our runout models so our focus now is very much on pre-sale campaigns and the launch of next-generation Megane and next-generation Koleos.”

Mr Hocevar said he would like to end 2016 with more sales than 2015, but acknowledged the difficulty in maintaining the brand’s rapid rate of growth.

 center imageLeft: Renault Australia managing director Justin Hocevar.

“We obviously want to see growth. It is going to be difficult for us to grow ... we are sitting at five per cent up at the moment. At the end of quarter one we should still be holding that sort of growth, I would like to think.

“Any significant growth would probably come in the second half of the year.

Obviously we have had some big double-digit growth in previous years, but it has been off a low base. Maintaining those levels of growth is going to be extremely difficult.

“I am sure my colleagues in Paris would like to see it continue, but being realistic, if we can continue to grow even at 10 per cent that would be a wonderful outcome.”

The new Megane is due in hatch guise in September or October this year before the arrival of the wagon in 2017, and Mr Hocevar said he hopes consumers will view it as more of a mainstream offering than previous versions.

“We think the new design, new levels of equipment, the specification of the vehicles here, the way we price the vehicle with all of the peace of mind behind it will help place us with greater opportunity than we had with the previous car,” he said.

“What we will see is a dramatic jump up in certain technology in the vehicles.

That will help get us back into the realm of opportunity there.”

While new go-fast Renault Sport versions won’t arrive for some time – possibly pushing out to 2018 – the current-generation D95-series three-door RS variants will continue to sell alongside the new-generation Megane.

Renault has already announced that it will not replace the Megane Coupe-Convertible, but a sedan is coming and it looks set to retain the Megane moniker unlike the previous version that was dubbed Fluence.

Mr Hocevar said the company was interested in reintroducing a Megane sedan, but added that he favoured keeping the Megane nameplate for all three body styles.

“We would look at it again but we wouldn’t look at having two separate nameplates again,” he said.

“It just makes your job difficult. If you have got a model family in a hatch, wagon and sedan, you are far more efficient with your communications strategy having one nameplate.”

While the Fluence failed to ignite in Australia, Renault had better luck with the second-generation Megane sedan which outsold the hatch variant three years running from 2007 to 2009, and even clocked up close to 1000 sales in 2008.

Mr Hocevar said Renault needed to focus on lifting the profile of the Captur crossover, adding that some buyers do not consider the Clio-based car because of its relatively small 1.2-litre engine capacity compared with its more powerful rivals.

“I think we need to be realistic about our Captur expectations. We would certainly like to be selling more and there are obviously some competitors doing particularly well, but the two volume sellers in there do have a slightly larger vehicle than us,” he said.

“I think we have still got work to do in having people understand what kind of powertrain do you really need in that kind of vehicle.

“Look at (Honda) HR-V and (Mazda) CX-3. They are running 2.0-litre and 1.8-litre. We are running in our volume seller a 1.2-litre turbo, and I think that on paper some people look at that and go ‘that is too big a gap’ and it is not until they have driven it they go, ‘I get it’.”

The tiny SUV captured 1614 sales last year after launching in February and while it outsold niche offerings in the hot segment such as the Suzuki S-Cross (1336), Skoda Yeti (855) and the Jeep Patriot (1385), it was well behind the Mazda CX-3 (12,656) and the Holden Trax (6350).

In terms of the dealer network, there are currently 52 Renault dealerships operating in Australia, and Mr Hocevar said there would be 60 up and running by the end of 2016, a massive increase from the 19 sites it had at the start of 2012.

He added that there is room for further expansion of the network on the back of the new model rollout that includes the Megane, the Koleos replacement and the production version of the Nissan Navara-based Alaskan pick-up in the coming years.

“We need to continue to expand our network but I don’t say that with some blind ambition to have a reckless number of dealers out there. We want to continue to work on throughput at dealers, always growing and making sure dealer profitability is really observed and we work with our business partners in the network to make sure we are all moving together in right direction,” he said.

“When you consider the products and segments we will have capability in out to 2018 let’s say, we do need to improve our footprint out there.”

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