Renault is Scared to Enter U.S. Due to its Inability to Compete
Better to be honest than delusional, right?by Kirby Garlitos, on
Renault is big in Europe and Asia. Just don’t expect it to set its sights on the U.S. with aims of conquering that market. That’s not happening, says Renault-Nissan Alliance CEO Carlos Ghosn. Instead, the French automaker will continue to set its sights on markets where it can be competitive. China and Russia top that list, but the company is also looking at the Brazilian market as a key region for growth. A look at the U.S. may still be in the cards in the future, but because of the level of competitiveness in the market, Renault is more than willing to sit in the sidelines and bide its time until that opportunity arises.
Don’t compete where you can’t beat them
Renault-Nissan alliance has somehow usurped both Volkswagen and Toyota as the world’s largest automaker with over 5.2 million cars sold from January to June 2017.
Carlos Ghosn’s logic is sound, so it’s hard to sit here and criticize the man on his position. In all honesty, Renault could enter the U.S. market if it wanted to. It has an established name and a long track record of excellence. But it’s not going to stand out in the U.S. because of how competitive the market already is. So why even bother when the automaker can look at other markets to help spur its growth. The strategy has worked so far this year as the Renault-Nissan alliance has somehow usurped both Volkswagen and Toyota as the world’s largest automaker with over 5.2 million cars sold from January to June 2017. That’s 400,000 more units sold than VW and 600,000 more units sold than Toyota.
In lieu of going to the U.S., Ghosn told Automotive News that he wants Renault to be a major player in the Chinese market. That’s the top priority of the brand at the moment. The French automaker is just starting to get a foothold in what has become the world’s largest car market. There’s more potential there for Renault to grow its brand because the market itself is on the upswing.
The Renault-Nissan Alliance CEO also pointed to Russia as a priority for Renault, even if the brand already enjoys a massive 35 percent market share in the country. The rationale in the case of Russia revolves around the local market’s steady climb back to relevance after going through the doldrums in recent years. If Renault, which already sells 1.4 million cars a year in the country - can grow its brand as the market becomes stronger, it’s looking at growing its sales volume to about 2.5 million cars per year, maybe even 3 million if the winds turn in its direction.
Long-term goal of 14 million sold units per year by 2022
It’s no secret that an auto conglomerate as big as the Renault-Nissan Alliance traditionally sets lofty goals to carry out. It’s no different here as Ghosn has been on record saying that he wants combined sales of all Renault, Nissan, Infiniti, and Mitsubishi models to hit 14 million vehicles a year by the end of 2022. Identifying the biggest markets for growth plays a big part in reaching that goal. So too does streamlining production to help reduce costs.
The alliance is keen on making that happen with plans to create four shared vehicle platforms that will ultimately account for nine million vehicles. There are already two platforms that are being used, namely the A-plus platform and the C/D platform. Soon enough, the automaker will add a B platform for subcompact cars and another platform that will be used for electric cars. In addition, there are also plans for brands to increase its shared powertrain numbers. Only one-third of all cars across the alliance share the same powertrains. Ghosn wants to increase that to three-fourths of all models to help mitigate the company’s expenses. “It’s a cost issue,” he said. “Because of the huge amount of new technology coming, the r&d costs are going to go up. We need to converge and have common platforms.”
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Source: Automotive News