2023-10-30 11:47:00
This week, the diamond brand unveiled its international plan with the launch of 8 new models for 2027. A strong ambition, accelerated by the group’s withdrawal from Russia linked to the war in Ukraine last year. To compensate, Renault would rather increase its sales in countries where the brand is already established. A decision that seems easier than conquering new territories on paper, but which comes up once morest international reality. First target for Renault’s reconquest: Brazil.
In this country, the largest market in Latin America and third most important for Renault, where the brand sold 126,689 in 2022, sales are slipping. If the French manufacturer’s market share reached 9% in 2019, it is now only 7%. However, Renault is not the only one to have stopped in Brazil, which has four times more inhabitants than France. Indeed, following Ford’s withdrawal in 2021, it was the Germans Mercedes and Volkswagen which respectively announced contract suspensions and a temporary cessation of production. This is due to lower production since the Covid-19 pandemic as well as very high inflation, marking a halt in sales of new cars.
Renault goes on the international offensive by launching eight new models by 2027
Brazil, great potential
However, it is Brazil that Renault has chosen to announce its international plan. It is this territory, too, that the brand has chosen to produce the first vehicle of this plan, the Kardian. This SUV will complement the success of the Kwid, another smaller SUV whose sales represent half of the brand.
If the situation in the country does not currently seem ideal, forecasts are rather in favor of the automobile industry. Already, Brazil benefits from a market of 215 million inhabitants for only 60 million vehicles in circulation. For comparison, France has a fleet of more than 40 million vehicles for less than 70 million inhabitants. In addition, the country’s middle class regularly renews its vehicle, approximately every 3 years, or three times earlier than in France.
The average purchasing age is 20 years younger than in France. And it is this target, young and urban, that Renault is targeting with its Kardian. Although no price has yet been revealed, the group is now aiming for the top 5 in sales, the brand director, Fabrice Cambolive, tells us. For now, the Renault brand is in seventh position in sales, far behind Fiat, Chevrolet and even Honda and Volkswagen.
The hybrid is gaining momentum
The French brand is counting on the appeal of new engines for the launch of its new vehicle. Indeed, Brazilian cars run on ethanol, thanks to the country’s significant sugar cane cultivation. The ideal in Brazil is to have a so-called flex tank, which allows you to choose between ethanol and gasoline directly when refueling, depending on the price. Above all, for some time now, the largest country in Latin America has seen an appeal in hybrids. Today, this technology accounts for 7% of sales, but is set to accelerate, in particular thanks to government incentives.
« Customs duties on vehicle imports are 35% in Brazil. However, for several years, those for hybrid and electric vehicles have been at zero with the policy of the last governments », Explains Luis Fernando Pedrucci, Renault brand director for Latin America.
If hybrid seems to be a promising solution for the country, electric, for its part, is still far from having made its mark. Only 0.5% of sales are electric vehicles in Brazil. “ The switch to this technology will not happen for 10 years », confirms Luis Fernando Pedrucci. Also, in order to avoid too large an influx of Chinese electric cars as in Europe, unions and traditional manufacturers are fighting to reestablish customs duties on these new technologies. A trajectory not currently studied by President Lula, who wants an accelerated ecological transition. Moreover, the Chinese giant BYD announced this week its first factory outside Asia in a former abandoned Ford factory in the northeast of the country.
No ecological bonus, no factory in France: the threat from the Chinese giant BYD
Next step, the pick-up
Because Brazilian factories have the reputation of being among the most efficient in Latin America. That of Renault surprises with its technological advance. Metaverse, artificial intelligence, automation… Everything is programmed here to speed up production. In Curitiba, where the Kardian will be manufactured, the factory is above all very modular and can accommodate any type of engine, including, ultimately, electric vehicles. It also makes it possible to produce several sizes of vehicles, from city cars to utility vehicles including a pick-up: the oroch.
Moreover, Renault also wants to launch a new pick-up in its international strategy. And what better place to start than Brazil. The country actually accounts for 13 to 15% of its sales, the fifth largest market behind Australia, South Africa, South-East Asia and the United States. Steep roads, long distances as well as the significant share of agriculture and the movement of goods are all reasons that push Brazilians to turn to this type of product. Above all, pick-ups make it possible to make more margins for manufacturers and on which Renault intends to expand its positioning.
“It’s a market that will grow in Latin America,” predicts Luis Fernando Pedrucci, “people use it in a hybrid way, 80% of the time as an SUV and 20% of the time as a pick-up. »
Renault will then launch these models in Morocco, Turkey and, finally, India. The objective: to convince these markets around the same series of vehicles. In 2022, international sales represented 69% of the group’s sales in Europe, compared to around 63% a year earlier.
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