Renault Australia held in higher regard than it thought, strong growth still left in it

Against the backdrop of continued record sales in Australia, Renault’s ambitious local arm has conducted a wide-ranging focus group study into what local buyers know and think about its brand â€" and the results have come as something of a surprise. 

It turns out that any perceived negatives about being French, and the stereotypes that perhaps engenders to automotive aficionados in terms of quality and reliability, are far less pervasive that it had guessed. 

As such, says Renault Australia managing director Justin Hocevar, the company has a “clean slate” to take the next step in its long march upwards from bit-part player. 

“There’s been a really interesting realisation for us in this last year, and that is that the closer you are to automotive the more aware you are of it [perceptions about Renault being unreliable] and perhaps hyper-sensitive to it. And in reality… it’s not quite true. 

“What tells us this is we undertook our biggest research project ever in Australia, it’s taken us almost a year to go end to end… to give true saliency behind what the Renault brand stands for in this market.”

“The results show two bookmarks, on one side a loyal group that “know us well and love us”, and on the other a group that “reject us, that probably will always reject us and we’d probably be wasting time, money and energy to turn around”. 

“And then there’s the big chunk of people in the middle, and that’s a huge chunk, a very big part of the market. And we thought we had no awareness with them, and we thought that what they did know about us was probably more negative than positive,” Hocevar said.

“But when we look at it, that’s actually not the case. There’s actually really good awareness of the company, but beyond that they don’t know that much about us. What that says to us is we’ve actually got a blank canvas. 

“We don’t have to change what those people think of us, we just need to communicate with them what’s in the DNA of this brand, we’re a company that’s been around more than 100 years, a company that’s had this rich history of innovation.”

This includes its long history in rally and Formula One, its focus on EVs, its market-leading light-commercials in Europe, the Renault Sport line’s involvement in grassroots racing and the fact that the Renault-Nissan Alliance is the world’s fourth-largest automotive conglomerate by sales. 

“We have to give them [buyers] some meaning behind the brand because people aren’t just buying an appliance,” Hocevar said. “I think people also want to connect with a brand that’s got a little bit of meaning behind it.”

So, given the company’s image is better than it perhaps thought, and given its growth trajectory, what can industry followers expect?

In 2010 the company moved 1907 vehicles out the door, in 2013 it was 7016 units and its year-to-date figure in 2014 is up a further 47.9 per cent on eyeing 10,000. A focus on growing its light-commercial business, and the big success of the new Clio â€" its top-selling model â€" have set a new bar for the brand. 

With new models such a the Captur crossover arriving by March 2015 and expected inside the company to sell in numbers equivalent to Renault’s current runners-up, the Megane and Koleos, significant incremental improvements can be expected into next year. 

While always cautious not to get carried away with volume projections, the company has good grounding to continue growing its sales above industry trends, coming off a low base as it has. 

A further range of new models with a more consistent styling language will help, and the natural momentum of ‘growth begetting growth’ will, too. The more Renaults people see on the road, and the more people whose friends buy a Renault, the more sales this reciprocally feeds. 

But far from making bold claims, Hocevar errs firmly on the side of caution, speaking at least externally about the need to grow sales at a pace with which its service centres can keep up. Why? Because any lapse in owner satisfaction would probably hurt this brand more than most. 

“We are ahead of plan, but I’m always careful to keep a lid on it. We’ve got to make sure as we grow we consolidate,” he said. 

“We’ve seen other auto brands that have grown really quickly, and we’ve looked at their customer satisfaction scores and their ability to service the market, and they’re plummeting. And for me that’s a wasted investment,” he later added. 

“It will give some short-term satisfaction to head office… but how does it mean you’ve got that consolidated, sustainable position? That’s very important for a French automotive brand to do, to build its credibility.”

The subtext here: People have disassociated from qualms over Renault’s reliability, and any retrograde step would sting. 

It is worth considering that one other European brand to grow its volume rapidly, Volkswagen, finished bottom in last year’s JD Power Customer Satisfaction study in Australia. VW Australia managing director John White has since then talked about the importance of not growing volume faster than your network can handle.

“Anybody can just crank sales up, but you’ve got to be able to take care of your customers, and that’s one of the things that happened to us, we grew really fast and the infrastructure at one point didn’t keep up, [but] now it’s keeping up,” he told this reporter recently. 

Where Renault goes from here will be interesting. Some vehicles, such as the Twingo and Espace, are deemed unlikely, hobbled by cost and LHD-only build. 

New-generation Megane, Koleos and D-segment sedan (Latitude/Laguna) vehicles will arrive by 2016, while a Renault ute using Nissan Navara bits is a strong possibility around the same time. A niche halo in the form of the Alfa Romeo 4C-rivalling Alpine coupe is also a lock for inside two years. 

EVs are on the outer. The Twizy falls foul of regulations in Australia due to being a pseudo motorcycle/car but not really either, while the Zoe and Kangoo ZE make little sense in the current political climate, where few incentives are offered for green cars. That said, Australia Post has four Kangoo ZEs and inside 24-months we’d bank on seeing more companies pick up that baton.

Finally, the budget Dacia brand is even a chance beyond 2017, though Hocevar warns that the company need to keep focus on its core and not just branch into every direction available to it, lest it lose focus. Interesting times await.