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Renault shelves Espace plans

Surprise legislative changes across several key European markets have prompted Renault to shelve plans for its next Espace multi-purpose vehicle range.

Due to reach showrooms next year, the new version of the trendsetting MPV, which sold 2,100 units in the UK last year, has been postponed after fresh research findings shunted the business case for the model into ‘borderline’ territory, AM can reveal.

Tax revisions linked to CO2 emissions in France, Britain and Spain dealt the final blow and have put the next-generation Espace back on the drawing board.

“As part of the plans to revitalise Renault, we planned to launch 26 new models before the end of next year.

Despite the poor economic situation, investment is in the pipeline for all of our new models except the Espace,” said Patrick Pelata, the French company’s newly appointed chief operating officer and second in command to chief executive Carlos Ghosn.

“We have been forced to postpone this product because of rapid and unexpected changes in market conditions,” he added.

“On paper, our plans for the Espace were fine, but revised anticipated volumes made them borderline.

Pressure from taxation linked to exhaust emissions was far more than we had imagined – it’s forced us to re-evaluate our ambitions in the upper part of the market.”

Effects of the new tax regime

Pelata said the new tax regime had also prompted a rethink of two other high-end models with retail prices in excess of €30,000 (£24,000).

“The game has changed since we laid our plans,” he added. “We’re in a challenging part of the market and have to be innovative.”

Renault has discussed the problem with Nissan, its alliance partner that is suffering from the same market conditions.

The two carmakers are working together on different scenarios for the future.“I think electric cars are set to play a big role for us. Using the technology we will have in 2012, we believe electric will account for 30% of the market. If technology accelerates, that proportion could be higher,” said Pelata. 

“The electric car is of great interest for people who don’t travel more than 150 kms from their homes.

If we can offer them transport costing 10% less than is provided by the best diesel car, it makes for a pretty compelling argument. 

“Electric power is my biggest concern in reshuffling our product line-up,” Pelata added.

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