Renault Group UK is half-way through its Go5+ five-year strategy and has already doubled its business since its rationalisation in 2012.
Managing director Ken Ramirez said there are four pillars of the strategy: passing a 5% group market share, a dealer network with profitability above industry-average return on sales, a high quality customer service and strong brand image.
Ramirez (pictured) said the 151-site network is already averaging 1.3% RoS, which is level with the national average provided by ASE.
“Over the past year and a half Renault Group has had the second highest throughput per outlet in the UK for mainstream brands, behind Volkswagen, so that adds a lot of value to the dealer network,” he said.
“It’s also been a challenge to our network because they’ve had to come along with us quickly and staff up. Certainly that means the franchise is gaining value, and we’ve seen that since mid-2014 we’ve had a lot of knocks on the door.”
Renault UK’s original plan was to grow the network by 20 sites within the five years, with franchisees who’ll want to stick with the brand for the long-term, but Ramirez said that has almost been achieved with two years to go, so a further 10 may be sought to ensure full network coverage.
Recruits have included Lookers, Vertu Motors, Arnold Clark and Glyn Hopkins.
“We don’t want to go too far, but we need critical market coverage. We want to be very careful to not affect the values of throughput per outlet, so with this growth we still intend to remain second for throughput.
"The dealer network is profitable now, was profitable in 2014, and we’re already there in our objective to be above industry average, though not by a big margin, so we’re already on the way.”
Ramirez said in view of the progress made Renault has re-forecast its volume goals, but not market share aims. It has already passed 4% combined share for its Renault, Dacia and Renault LCV operations, and the 5%+ aim for 2017 looks achievable.
For the company to stretch further in market share, it could pull down some of the other pillars, he said, such as damaging the brand’s residual values or impacting dealers’ returns, he said.
Renault revealed the next generation Megane, its C-segment car, during the Frankfurt Motor Show.
Ramirez said the car is making a lot of segment firsts for the brand, bringing options such as a head-up display, four-wheel steering, a portrait tablet screen, and colour-changing ambient lighting connected to the driving style, when it arrives in the UK in summer 2016.
Its pricing is yet to be announced, but Ramirez said it is an advance on the current Megane and wouldn't rule out a price increase.