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Renault dealer and product cull as network fights for profit

The Renault product plan

A dramatic cull of several model lines on February 1 will see Renault UK left selling only its profit-generating small and medium cars plus its entire light commercial vehicle range.

Trim levels will also be slimmed down to four options, deleting Pzaz and I-Music.

The gap left will be partly filled by bringing in its ZE (Zero Emission) models during 2012, the arrival of the next generation Clio at the end of the year and the Dacia models.

Asked if the large models, next-generation Laguna and Espace, will eventually be reintroduced, Renault UK managing director Thierry Sybord said: “We will have to wait and see.

"We don’t have the opportunity today to sell profitably normal cars like a saloon, where the market is split between the German brands and the big fish of Ford and Vauxhall.

"It is difficult to compete in the D-segment against Ford and Vauxhall so a Laguna in the future will have to offer something very different.

"We can expect something very different with the next generation Espace and that will be worth looking at.”

Going out

  • Wind – annual sales 1,535 units
  • Modus/Grand Modus – annual sales 2,511 units
  • Laguna/Laguna coupé/Laguna Sport Tourer – annual sales 2,399 units
  • Kangoo – annual sales 1,474 units
  • Espace/Grand Espace – annual sales 381 units

Staying in

  • Twingo
  • Clio/Clio Sport Tourer
  • Megane/Megane coupé/Megane Sport Tourer/Megane CC
  • Scenic/Grand Scenic
  • All current LCVS

Coming in

  • Kangoo Van ZE
  • Fluence ZE
  • Twizy ZE
  • Zoe ZE
  • Clio replacement
  • Dacia Duster
  • Dacia Sandero
  • Dacia Lodgy (TBC)
     

What are the options

Jonathan Butler, a partner at law firm Geldards, said notice of termination can mean an opportunity for a dealer to consider their choices.

It’s a chance to look at the returns they’re getting on their investment and examine whether better returns can be found elsewhere.

The first step should be to gain legal advice, he said, and consider the leverage they have to stay with the franchise, or to be attractive to other brands.

“This is your business to protect, you have plenty of avenues of redress.

"You don’t need to feel fearful of vehicle manufacturer reprisals. Be proactive, don’t bury your head. Seek prompt legal advice and engage with the manufacturer to find out what it is behind their motivation,” Butler said.

The European Commission’s Block Exemption Regulations on aftersales allow a dealer which has its franchise terminated to continue as an authorised repairer providing it still meets its standards.

So if the dealer retains its trained technicians, tools and parts supply, it can retain its aftersales even after re-franchising.

Brands looking for new dealers include Hyundai, Kia, MG, Seat, Skoda and SsangYong.

In addition, the imminent arrival of Chinese brands Great Wall, through importer IM Group, and Geely, through licensee Manganese Bronze, may offer alternative opportunities.



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Comments

  • kevthebass - 15/06/2012 12:16

    So dealers that survive this cull are expected to invest £000s in a slightly different shade of grey showroom tiles etc. When will manufacturers realise that this spend will not bring in one single extra customer nor improve customer service levels which depend on people and process. Funny how recently during a week touring France most french Renault dealers appear not to meet the UK franchise standards from 20 years ago never mind the current requirements. My local BMW Motorcycle dealer, of 14 years, was told by BMW to relocate 18 miles to a city location, spending £2.5 million in the process. They didn't have the cash, want to incur the debt or see the need for it so they were terminated. The "new" BMW Motorrad dealer is tagged onto a car dealership and has the same sanitised totally disinterested customer experience as most car dealerships. It's people and enthusiasm that make the difference NOT glass palaces.

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