Renault's Australian Outlook

[deja vu 25]

Guys. Don't stress too much. It would be silly for Renault to pull out again after trying so hard to get re-established and build peoples opinions.
As I have said before 3000 cars per year is much better than the couple of hundred they were selling back in the late 80' and early/mid '90's. You now see new Renaults daily (albeit Clio's and Scenics). Time will prove their success. Advertising is a BIG Factor. After the first 20 mil, they add dried up and thus the sales slumped. Look at Volvo and SAAB, they do not sell as many cars here in Aus as Renault and no one is saying "ohhh we are not selling 6000 cars a year so we had better get out of the market".
Look how long Pug's have been in the market, no their sales are really booming, but it took time.
With many exciting new vehicles and a decent line up Renault will do well - I personally think they are now anyway compared to the last 25 years sales history.

Anyway they can't leave - My wife and I wish to buy a new Renault in the next few years anyway, and we have always wanted to actually pick the colour we want!!

 

[Pug307]

Look at Volvo and SAAB, they do not sell as many cars here in Aus as Renault and no one is saying "ohhh we are not selling 6000 cars a year so we had better get out of the market".

They aren't losing money like Renault - they're dealing in far higher margin products than Clios and Meganes, they don't need to sell as many. What's the average price on a new Saab or Volvo sold downunder, vs the average price on a Renault sold? Renault needs volume. I think they will stay, there is the potential to make money, and you don't throw away $20M lightly. The Megane experiment will give us a good idea over the next year.

Things should improve when the new Scenic arrives next year - the current one feels old and tired. It's an old design now.

The answer is blanket advertising..I want them to do well here....

Are you sure you don't work for an advertising agency?

Advertising ≠ Sales


​

One of the criticisms I heard from the dealer yesterday is that Renault are simply too soft in their approach to competition. I guess it's true, because I didn't know that Clio, Scenic & Megane Expressions were all on driveaway pricing.

I wanted to purchase a cliosport when they arrived however i was treated like a leper by their salespeople in the showroom, a very bad experience i'll never forget.

I think there are a few Aussiefroggers who would agree with you on the standard of Renault dealers. In Victoria we have a few good ones though.

Sorry for the longish post, cheers jr

You don't need to apologise - it's hardly a long post by Aussiefrogs' standards

 

[Europa]

The AU$20 million figure sounds like a lot of money, so I thought I'd compare that figure with Renaults income.

Looking here I see income for the year 2000 was €1080 million. A rough conversion here puts that at AU$1700 million

So, AU$20 million represents about 1.1% of that total.

To me, that sounds like a reasonable investment to make, especially as the investment should return a profit sometime in the future. As an indicator, I believe IT budgets are usually about 4 to 5% of income - and they are usually considered a cost to the business (ie. no revenue generated)

Now I'm no accountant so please feel free to correct me on this!

 

[frogs4ever]

Looking here I see income for the year 2000 was €1080 million. A rough conversion here puts that at AU$1700 million

So, AU$20 million represents about 1.1% of that total.

The trouble is, the $20 million is 1.1% of Renault's entire world wide income for that year. That's a big slice to spend on a country which is so small and insignificant by world economic standards. They must be asking themselves, "would that money be better spent in the high population, rapid growning economies of South East Asia?".

 

[Europa]

That's what Samsung is for...

 

[REN TIN TIN]

Renault’s biggest sin was pulling out of the market in the 90’s. (You could argue that they effectively pulled out the market in the late 80’s and were only selling piddly quantities for a long time before the officially pulled out). They’re now faced with spending large amounts of money to get back into a market they deserted and it’s going to take a while (years) to win back the loyalty of the car-buying public.
They’ve probably already tapped the Renault/French car enthusiasts segment of the market so need to broaden their appeal to the punters that have little or no brand loyalty, i.e. they buy a car because it was the best combination of looks/price/features/ (or whatever else motivates them) on the day.
Renault certainly has the cars, but they don’t operate in the ultra-cheap Korean shitbox segment of the market where the only thing that matters is the price. Here you win business by being the cheapest.


Ren

 

[Europa]

Yeh, but the WHOLE market isn't Korean is it - I mean, otherwise there wouldn't be so many bloody commodores out there

Renault has to find a middle location - not competing with the extreme bottom end, but not stretching itself out of it's "class" either - where people just won't pay the money because of the badge...

 

[mistareno]

I think that Renaults main problem in Australia is supply.

They release a new model in Europe, that recieves rave reviews and sells like hot cakes, but it then takes upto 18 months for that model to land over here.

The Scenic is an obvious case.

The Scenic was a pioneering model when it was released in Europe. It was a car that was without a direct competitor. This being the case, it had 2 years to build up market presence.

By the time that vehicle arrived in Australia, within months we had the Mazda Premacy, Daewoo Tacuma (ripoff) and Holden Zafira all competing for the same market share.

The same could be said for the Laguna II. If it had arrived in Australia within a few months of its Euro release, it would have been a new kid on an old block over here. Instead, due to the delay, it arrived within months of the Mazda 6 ( A car that Renault should be using as the premium price model in the Laguna segment IMHO)

Clio is an old model that, due to marketing and reputation, continues to sell well in Europe, despite it's age.

Unfortunately, in Australia, depite being at the pointy end of the mini field in most aspects, it is lost in a sea of cut-price competitors.

Then there is the Nissan Australia problem. Do they really want to be competing directly in price with Renault? Do they want a $19,990 Megane Sedan in the showroom nextdoor? (BTW - It will be very interesting to see how the "renault style" Pulsar sells when it lobs here next year.)

Perhaps they intend to establish Renault as the premium brand and keep Nissan as the Budget brand? If that is the case, I hardly see the 350Z as a vehicle produced by a budget manufacturer. I also dont see the value in selling a smallish hatchback like the Megane deep into Camry/Commodore/Falcon/Magna territory.

I think the main problem Renault faces is a brand problem. I am a Renault nut, and could probably afford a Clio Sport, but I have nightmares of the 80's when Renault changed distributors several times and eventually pulled out all together, leaving owners of the then super expensive Renault 25/21 without dealer support and in possesion of a depreciating nightmare.

Renault is going through a tough time in Australia at the moment. This was always going to happen. How they deal with it is going to be interesting.

What would I do if I was at the wheel of Renault Australia?

Pricing -
I would establish (and market as such) pricing parity across the range with Holden or Toyota.
Clio = Echo or Barina
Kangoo = Barina Combo
Megane = Corolla or Astra
Laguna4 = Camry 4
Laguna6 = Camry 6 or Vectra
Renault is a bread and butter brand in Europe, why should that change overseas, the competitors are still the same.

Marketing -

More brand based advertising.
Let Australia know that Renault is the biggest selling brand in Europe.

Promote the fact that Renault has been behind many engineering advancements (turbochargers, seatbelts, F1 etc)

Save money and use the Euro ads such as the Wallace and Grommit Kangoo ads.
(the big butts add is a good start i suppose )

The next year for Renault will be critical. Will the MeganeII be recieved well by the Australian Public? I think it will. Will they pay a starting price of $25,000 in a toughening economic climate? That remains to be seen.


For those interested, here are UK prices for comparison

UK Prices
Small Hatch -
Toyota Echo (Yaris)1.3VVTi 5 door GBP 10700
Renault Clio 1.4 5 door GBP 9100 (almost $1000 cheaper)

Medium Hatch -
Toyota Corolla 1.8VVTL-i 5 door GBP 16000
Renault MeganeII 2.016V 5 door GBP 13800 (more than $2000 cheaper)

Large Saloon -
Toyota Camry V6 (top of the range) GBP 26560
Renault Laguna V6 Dynamique GBP 26200 (300 cheaper)


Australia Prices
Small Hatch -
Toyota Echo 5 door $15990
Renault Clio 5 door Expression $19990 (4000 more expensive)

Medium Hatch -
Toyota Corolla 1.8VVTi 5 door Ascent - $19990
Renault Megane 1.6 base 5 door - $25990 (6000 more expensive)

Large Saloon -

Toyota Camry v6 Azura - $48990
Renault Laguna v6 Priv LX - $57990 (9000 more expensive)

Why is it that when Renaults are cheaper than an equivelent Toyota product overseas, there is a 25% mark up by the time they reach our shores?

I realise that there is some added fruit in some models, but the Top of the Range Camry has everything including the kitchen sink in it (leather included) and your still getting a bigger car with the Camry (and Toyota's percieved reliabilty )

If Renault is trying to get exclusivity as one of their brand traits, they're going the right way about it. I dont see a $31990 base 2.0L Holden Astra. The 2.0L Astra (also fully imported BTW) can be had for $20K flat from most dealers.

Come on Renault, if you want volume, get serious, stop with the elevated price BS and give us a base 3 door Clio1.4 with air for under $15K and a base 5 door with air for $15990.
And please explain to me why a Megane is suddenly 20-25% more expensive in Australia than a Corolla which is a more expensive car in the UK....


(this has been reposted from another similar thread)

 

[Haakon]

Very well said Mistareno, summed it up nicely. Should send that to Renault Aust. and see what they say!
ps come round anytime next week and pick up your brakes.

 

[Simon]

The Renaults are not overpriced in comparison to the perceived market level, and the standard kit of the car. The Renault range commences at $19,990 for the 1.4 Clio which is lineball with the VW Polo (3 door), Pug 206 XT 5 door and Citroen C3.

I really don't think that the market sector desired by VDA for Renault is in the dog eat dog class of Toyota and the like. Renault being an upper middle marque with a European heritage and flair to exploit. It would appear a sector seemingly profitably occupied by Peugeot, Citroen and VW all which are at identical price points with Renault in each of their competing models.

 

[deja vu 25]

IMO I would rather pay 4 or 5 grand for a 1.4 Clio which is much more solid, safe and better car than a Toyota Echo. Unfortunately if Renault were to bring in a bread and butter clio 1.2 or 1.4 it would have minimal features and would not appeal as much anyway. Yes, I am sure they would sell a few, but same goes for the Megane, Renault Aus can't bring in every model as they do in the UK etc, as cost for compliance etc would be too great. We have a great range now, and it is going to expand by 50% in 2004 anyway. They will get there in Aus and will be performing like Pugs do now in 5 to 10 years. Nothing happens over night. As discussed previously, Bad move to pull out in the mid 90's - that will take a good few years to re-cover from. People will be waiting to see what re-sales are like and also that Renault REALLY is committed to staying this time.

And yes, MORE ADVERTISING, exciting adds and blowing trumpet on safety, and other great inventions of the past.

 

[jr20516v]

Hi Europa.
In answer to your questions, yes i live only 2k's from a Reno dealer [they were the leper ppl ] and the next one is 30k's.... a long way to take a car for a service.
Yep, its still the same salespeople. They are so efficient they keep sending me
brochures on the Laguna when all along they knew i wanted a clio?? After the boil went off the clio's they wouldnt leave me alone even offering me a test drive
Wow!! Thats something i couldnt get at clio launch.
When they phone me up they call me Brian [my names actually John - LOL]
The final nail as i said was the reliability factor which stopped me and now in hindsight the resale values. They all add up to a NO SALE.

Only my 2c worth [plus gst ] JR

 

[mistareno]

Unfortunately if Renault were to bring in a bread and butter clio 1.2 or 1.4 it would have minimal features and would not appeal as much anyway.

The problem is that the prices I refered to were for the SAME models as sold over here ie:expression 5 door 1.4 16V. The SAME Kit in each model (or as close as could be chosen) these were not stripped out models. In fact, the more basic Yaris (Echo) cost the same as the kitted up Clio Expression.

Renault IS NOT a prestige European brand. Adding Electric windows and other options doesn't make it one overseas.

Renault is at the LOWER end of the market in nearly every other market on earth.

Renault is a VOLUME manufacturer, always has been. If anything, Toyota seems to be more of a premium price model in the UK.

Renault Oz may like you to believe that Renault is a mid luxury European but they are NOT.

From what I have seen of Renaults sales expectations they want to be selling 10000 units by 2007.

This would be more than Peugeot, Renault and Citroen combined in 03. 10000 units is heading well and truly into volume sales. Perhaps they expect the commercial side to sell well? They will, if priced the same as they are in Europe.......Cheap.

10000 units based on current pricing? Forget it. People these days aren't stupid. It took me ess than 2 minutes to find out that Australian Renault prices are inflated by 20%. Do you think non-Renaultphiles about to fork out 20K would just go in blind folded?

It's not going to happen.

BTW the Yaris has a very good reputation in the UK as being a well engineered and well packaged little car. It won the European Car of the Year in 1999 or 2000 and still sells well despite being at a price premium.

 

[Europa]

Interesting regarding the pricing comment, last time I was talking to a mate in France, we were comparing pricing and specs and the Australian price was either lineball with the French price or actually cheaper.

Is it more that Toyota is cheaper? Maybe making the Avalon (shudder) in Australia brings them import tax credits...

 

[Simon]

Do you think non-Renaultphiles about to fork out 20K would just go in blind folded?

Well, they would either go to a Renault dealer or shell out a similar amount of cash for a similar level car from a Cit/Pug/VW dealer, whose cars that you see quite regularly now. Obviously those buyers have either screwed the dealer down, or are happy to pay slightly more for their cars than a Toyota. Neither the VW/Cit or Pug would be considered upmarket in their home markets either, but in Australia they are priced above their normal home market segments and seemingly doing OK.

I really believe that a "generic" Australian based Renault prospect would have to be looking in a different market sector than a typical Toyota buyer. Otherwise why would multi dealers exist where if you buy by price alone you would likely pick a larger Nissan Pulsar for $19,900 instead of a Clio.

 

[BogMaster]

I really believe that a "generic" Australian based Renault prospect would have to be looking in a different market sector than a typical Toyota buyer. Otherwise why would multi dealers exist where if you buy by price alone you would likely pick a larger Nissan Pulsar for $19,900 instead of a Clio.[/QUOTE]

I guess it comes down to where Renault wants to place itself and just how it intends to grow its market share. Right now I reckon that there would be no substitute for price/specifications (ie value for money) as an incentive for prospective buyers to take a punt on what might otherwise look like a risky proposition.

Renault needs to have a volume of new cars on the road if it is going to look like a serious long term option. It needs to overcome the fact that it left the Oz game in the 90's under less than happy circumstances, following a decade of sloppy marketing and product support. In some ways sticking Nissan badges on the vehicles and positioning them within the Nissan range might be a better ploy.

 

[Haakon]

[ In some ways sticking Nissan badges on the vehicles and positioning them within the Nissan range might be a better ploy.

[/QUOTE]

As much as the idea horrifies me, it would boost sales a lot I reckon - look at how many loyal Holden people bought Apollos etc

But really, I still think they are being brought in too expensive - Astra, Focus, UK built Pulsar hatch, they are all fairly cheap against jap stuff. Doesnt seem to be an exsuse for the Megane to be that much dearer.

 

[Pug307]

From what I have seen of Renaults sales expectations they want to be selling 10000 units by 2007.

Actually, the comedians were aiming for 25,000 :roflmao:

VW has passed 10,000 for the year.

Mercedes is sitting on over 17k for the year (take away 3.5k for various light commercials though).

BMW are sitting at 12k.

This would be more than Peugeot, Renault and Citroen combined in 03. 10000 units is heading well and truly into volume sales.

Not quite. 11,830 Froggies sold YTD.

10000 units based on current pricing? Forget it. People these days aren't stupid. It took me ess than 2 minutes to find out that Australian Renault prices are inflated by 20%. Do you think non-Renaultphiles about to fork out 20K would just go in blind folded?

Now, if we believe the guy that runs the 206gti.net mailing list:

Thanks for that Justin, very interesting. Most of it makes a lot of sense:

- 307s are great cars - the dealer in Adelaide just sells every car they
get.
- Not surprised a lot of Golfs get sold - they're good cars - my other car
(wife's) is a Golf.
- Not surprised the Echo's sell a lot - my family has a few as well as a few
Corollas - they're very good value for money for small run abouts.
- Not surprised about the Renaults - they're just ugly (Sorry Dave).

:roflmao: :roflmao: :roflmao:

I don't know whether pricing is really the main issue, after all Peugeot has managed to succeed with its positioning and I suspect people downunder don't perceive a Euro marque such as Renault to be a bargain basement car. You don't want to turn Renault into France's Kia overnight.

Renault has some very good value products on the Aussie market. Whilst the entry price may be higher in a Clio, than a Barina, a Barina will also cost more. Does Renault need to get down and dirty and advertise the Clio with A/C as an option. Sure it's cheating (because any sane person wouldn't buy a car without A/C, little wonder VW only brought in 5 non A/C Polos at its launch), but everyone else seems to do it in that segment. I'd argue a Clio is better value than a C3 or 206 - last month the 206 & C3 beat it in the sales charts.

It's similar with Peugeot and the 307. You pay more for a 307 than a Corolla, but you get more. Spec a Corolla up to 307 levels and then you pay more than for a 307. The Megane is basically priced at 307 levels.

A lot has to do with the brand and the product. I'd also throw in the distribution network.

The Scenic is old, the interior feels cheap and old, it just doesn't feel as impressive as the competitors, as the benchmark has moved on. It'll be replaced, and the replacement isn't as polarising than the Megane hatch (in terms of appearence).

The Megane Cabrio - again, old, old, old. You need to compare it with what is currently being offered in the market place. I would say pricing hurts it a little too, it doesn't feel like a $40k car. Again, being replaced. Sales have crashed, as the rental fleets aren't buying them anymore. I wouldn't be too flustered about this model anyway, just wait for the replacement.

The Clio - yesterday's car in terms of packaging, something which is becoming very important. Barina, 206, C3, Jazz, Mazda2 have much more room inside. Sure it's a fun drive, but some people actually prefer light steering (I'm thinking female customers here, I've got friends that think that way). The trim in the Expression model is plain horrible. It's got that funny face - a few of my female friends wouldn't touch one because of that. You can't blame bad press - this car has had a honeymoon period with the local press. The local press like it more than the Euro press!!! They should push the fact there is driveaway pricing much harder. That makes the price much more palatable (in doing so you effectively have a car with a RRP of ~$17,500). Now perhaps you could bring out the povo pack model, but if you throw in a 1.2l engine, you won't be popular. In Australia, people have a fixation on engine capacity.

The Laguna - you put an entry level V6 model, but put in trim that's as bad as the Clio Expression??? In a car that's RRP over $50k on the road? I don't care that it's the base model Laguna V6, that trim makes it feel like a taxi. At this end of the market, when you're paying more than $60k for a Privilege LX, you need credibility with that badge. I don't think Renault is there yet. I don't know whether Renault could sell a Laguna profitably at Camry price levels. A Laguna with pricing that starts in the $20s?

Can Renault price at Toyota levels and be competitive? They're a much lower volume seller here (let's be honest, in the foreseeable future, they always will be). Toyota's sold 170k cars this year. Renault hasn't even sold 2% of that. Renault's offerings are still good value. Downunder, they're what I term a transitional brand, they don't have the volume to do Toyota pricing. It's above your standard Toyota, Ford, Holden, but not up there your Saab, Audi, Volvo, BMW, Mercedes, etc.

The main hope lies in the Megane. On paper it should do well. It's a nice car to drive, it has showroom appeal, as long as you can get over that funny derriere.

Dealers. If you're going to position the brand a notch above 'normal' offerings (ie. your Toyotas, Fords, Nissans, etc) you need the network to match. I don't like the old fashioned, 'push em hard', mass market, basic customer service attitude prevalent in some of the dealers. We seem to have a plethora of complaints here about lousy Renault dealers.

I don't think Renault needs a radical change in pricing, some small tweaks here and there for pricing would do. Radical shifts downwards aren't going to impress existing customers. At the end of the day, Peugeot has proven that you can price at a higher level, but offer more, and still do very well. Time will certainly help Renault, as the brand develops credibility and new models come on stream.

But, hmmmn, if they really want to sell 25,000 cars p.a. by 2007, maybe they better start Toyota pricing

 

[Pug307]

As much as the idea horrifies me, it would boost sales a lot I reckon - look at how many loyal Holden people bought Apollos etc

They didn't sell that well IMHO.

But really, I still think they are being brought in too expensive - Astra, Focus, UK built Pulsar hatch, they are all fairly cheap against jap stuff. Doesnt seem to be an exsuse for the Megane to be that much dearer.

I disagree.

Lets look at the Megane Authentique 1.6 - $25,990.
Ford Focus 1.8 LX - $26,070
Holden Astra 1.8 CD - $26,810 ($23,990 + $2820 for A/C, ABS & TC). It's $25,870 for just A/C.

I think you've just highlighted a problem - perception.

It's something I come across with the 307. People don't believe you that a 307 costs less than an equivalent Corolla. But it does.

 

[mistareno]

I think you've just highlighted a problem - perception.

It's something I come across with the 307. People don't believe you that a 307 costs less than an equivalent Corolla. But it does.

1.6 Peugeot 307xe - 25990 (AC, no Alloys)
1.8 Toyota Corolla Seca Conquest - 24240 (AC, with Alloys and 100kw motor)

If Renault and Peugeot offered the same line-up as Toyota ie - 19990 base and mid 20's general luxury (A/C, Alloys, Power windows etc) they would be more competitive.

I think that the Australian buying publics perceptions have changed from the days of the Peugeot 504's and Renault 12's. In the 70's people used to think that the Japs were jap crap. These days the average punter thinks that the Japanese make a more reliable and durable product than the (non-german) Europeans. Unless you can match (or better) the Jap prices, your going to struggle to move numbers. Take Fords Focus vrs Toyota Corolla

Ford Focus-
Great car, Strong Badge, Big Dealer network, slightly pricey = No Sales

Toyota Corolla-
Good car (inferior to the Focus IMO), Strong Badge, Big Dealer Network, low starting price = Huge Sales..

If Peugeot offered a 307ex (Front power windows, no trip computer, airbags x 2 for $19990 with air as a $1000 option) they would sel like hot cakes.