Renault has “stopped the bleeding” at its embattled UK operation and expects to be back in profitable growth by the end of this year, chief operating officer Carlos Tavares said.
Eighteen months ago, the carmaker cut its model range and slashed its dealer network as sales in Britain slumped.
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Tavares said: “Since then we have put a healthy business plan in place focusing on returning to profit and supporting our customers. We are now leveraging the success of new products such as the Clio, Zoe and Captur.
“For the first time, the UK unit has a five year mid-term plan in place called Go5plus and this has the full backing of the dealer network which is on board with us.”
Tavares also said the company is addressing pricing issues in the UK bringing to an end such deals as zero interest finance and cashbacks.
“We are working on this, we have right-sized the company, now we are concentrating on the value of our products. Deals such as we did in the past do noting for the value of the brand.”
He added, however, that there has no been no decision on when or if Renault will reintroduce its larger models such as the Laguna or Espace.
“That will eventually be a decision that is taken locally.”
Tavares revealed that every new Renault since the introduction of the new Clio has to be number one in its consumer clinic before it can be considered for production.
He added: “if it is not number one we suspend production. We have already done that with one model.” He declined to say what that model was.
Renault is in good health globally, said Tavares, and is debt free.
“We are cash positive which is an exception for a European carmaker. We have had positive cash flow for the past four years and we are in the position to be able to pay for all our investments through profits generated.
“We have been able to protect our positive operating profit for the past few years while others have gone into the red. But there is still room to improve the numbers.”
Renault is on track to hit its global mid-term target of 5% operating profit by 2016 and Taveres stood by the company’s position on electric cars dispute slow sales around the world.
“EV sales will only move in one direction and that is upwards whether it is in one, two, five, 10 or even 20 years. Sales in Europe in 2012 were 18,000, this year the number could be 36,000 but the important thing is that we have leadership with the technology for the future.
“We have 51% of the European EV market and our share of the segment in France is 77%. We want to be seen as being the leader with vehicles such as Twizy, Kango, Fluence and Zoe. A new generation of buyers will grow up knowing that Renault is the technology leader when it comes to zero emissions.”
Tavares is also confident for the future for Renault niche brands such as luxury Initiale and sporty Alpine.
“In Europe, luxury is perceived as German but in China or Korea, France is also considered as luxury so perception is different around the world.
“As for the re-launch of Alpine the name still has a lot of brand value. The A110 for example, which we stopped making in the 1990s, still holds incredibly good residual values and we can build on that heritage.”
Quality has also improved over the past decade and Tavares said that in last year’s performance survey with alliance partner Nissan, three of the top four factories globally were Renault’s.
“That is a big success for the Renault Manufacturing System. We have invested time and money in improving quality, cost and lead times and there is also now a much higher level of maturity within the unions and the workforce.”
