Straight Talk at Renault Roundtables
February 27, 2008

By Nick Kurczewski

PARIS -- Surrounded by cameras and hounded by journalists, there was no doubt Renault CEO Carlos Ghosn was the star attraction during the French manufacturer’s financial results meeting held recently in Paris.

However, some of the most tantalizing details as to how the Renault-Nissan alliance will approach the coming years came during roundtable meetings with Renault’s top executives.

AutoObserver's first discussion was with Stephen Norman, senior vice president for global marketing.

Russia, India…and a Sexy Hatchback
Carlos Ghosn mentioned Renault’s alliance with Russian carmaker AvtoVAZ. How significant is the Russian market to Renault?

“The forecast for the size of the (Russian) market month after month is exceeding all our expectations,” Norman said. Ghosn had made a point of mentioning Renault-Nissan will become the world's third-largest automotive group — behind General Motors and Toyota — when the French company seals its partnership deal with Russia's AvtoVAZ.

Norman said the first order of business would be to utilize spare capacity at AvtoVAZ’s sprawling factory in Togliatti, Russia. He confirmed the successful no-frills Logan range would be the first to make use of this extra capacity. Renault and Nissan vehicles could follow.

In return, AvtoVAZ will be allowed to transfer Renault technology to its woefully outdated and outclassed Lada range of vehicles. “There is nothing wrong with the Lada brand, as a brand,” said Norman.

“Quality control, engines, gearboxes and, eventually, vehicle platforms” will be shared with AvtoVAZ and used on vehicles that will be sold as Ladas in Russia and throughout “surrounding markets.”

The low-cost Logan sedan and wagon have been a huge success. Who is buying them, and why?

“This is a vehicle that has an access price of around €8,000 ($12,500) in Europe,” said Norman. Though that price makes it a relative steal in Western European markets, Norman said in emerging markets the Logan remains “a very significant purchase” for car buyers. Norman credits the Logan range for its overall “robustness, spaciousness and comfort for long journeys” as being part of the reason for its sales success.

Ghosn said the joint venture with Indian manufacturer Bajaj Autos will result in a competitor to the $2,500 Tata Nano. Does this Indo-French vehicle have a future in other markets?

“If it’s successful in India and is transferable to other markets, then yes,” said Norman. Interestingly, he said the origins of the super-cheap Renault city-car project “extend beyond the Tata Nano.” He gave no explanation of this, or whether prototypes had been built or other alliances considered before the deal with Bajaj.

As for the image often used by Tata Motors during the Nano’s debut — of Indian families moving from their overburdened scooters to the (relatively) safer auto world — Norman was surprisingly blunt. “We don’t think there is a moral duty here. If it’s profitable, then we’ll do it.”

And Renault’s future in Europe?

Norman said innovation is going to be a key factor in winning over new customers. He believes this will be especially true when it comes to Renault’s new Active Drive four-wheel steering system, set to appear on the Laguna Coupe. “We can make [Active Drive] as important to us as Quattro four-wheel drive is to Audi,” said Norman.

He could hardly contain his excitement when the subject turned to Renault’s new Mégane hatchback. Set to appear at the Paris auto show in September, the Mégane is a bread-and-butter model that can’t afford to be mishandled. “Just wait until you see it, you’re in for a big shock,” enthused Norman. “It’s going to be one of the most beautiful cars in the world.”

Motorsports and sporty cars, Israel and electric cars
At the second roundtable, AutoObserver joined Patrick Pélata, executive vice president of the Renault Group plan, product planning and programs. During Ghosn’s turnaround of Nissan Motors, Pélata served as the Japanese company’s executive vice president, corporate and product planning, design and programs.

Do the millions of dollars spent in Formula 1 racing translate to showroom success?

“People don’t have the level of confidence in the [Renault] brand that they should,” said Pélata. Though the Renault F1 effort struggled last year, the team did capture the Driver’s Championship in 2005 and 2006.

Pélata acknowledged the Renault lineup needs sportier models to capitalize on the F1 link. “Formula 1 is going to give you a sporty image, so long as you are building sporty cars. We are working in sports cars and I hope that you will see something in a couple years.”

Pélata hinted such an effort could lead to a resurrection of the Alpine badge, a high-performance range of Renaults popular in the 1960s and early '70s. “We would love to do a cheap sports car. But it has to be fun in a modern way,” said Pélata. He believes a low price and low-speed driving fun are vital to the idea.

Ghosn mentioned the electric car that will be sold in Israel in 2011 and other markets in 2012. What else can you tell us about these cars?

Pélata said a similar idea was first suggested during his time at Nissan but at the time the costs were too high. “We simply could not find the business case for this type of car at Nissan,” he said.

He said the challenge was then given to Renault’s engineers. As they worked around the problems of the vehicle’s cost and complexity, Ghosn met with Shimon Peres, Israel’s current president. Peres told Ghosn of the wish to make Israel free of its dependency on foreign oil by 2020.

Pélata said Israel’s geographic and financial advantages — most drivers average less than 43 miles per day, and buyers of zero-emissions vehicles receive hefty tax incentives — make the country an ideal first step for Renault’s lithium-ion battery powered car.

Pélata said the Israeli electric car sold in 2011 would be based on an existing vehicle “right in the middle of the Israeli C-segment market.” That not-so-subtle hint makes it a 99.9 percent certainty the basis for the car will be the next-generation Mégane.

Pélata also said the electric car sold worldwide in 2012 will not be the same as the Israeli model, but an entirely new vehicle in its own right. It could be marketed as a Renault or Nissan, depending on the market.

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