31st July 2009

Renault Laguna hard lesson

Renault Laguna hard lesson

30th July 2009 21:20

We have been in the thick of the second quarter companies’ results season and it has been pretty absorbing.

In Europe, Volkswagen did well, its global footprint helping it to ride the recession. Fiat did slightly worse than expected, but not that bad. Daimler sees chinks of light. BMW is facing a slight wobble this week, though it could be much worse (‘it could be worse’ must be something of a mantra among CEOs).

But the Frenchies – PSA and Renault – will probably want to forget 2009 as soon as they can. Renault, in particular, posted a Q2 stinker. Why so? Well, some of the cars just ain’t selling. Renault had a very bad first half for sales in Europe. The Laguna, first half production volume down almost 60% on last year, stands out.

If you recall cars like the Vel Satis and Avantime, they had a certain something. The Vel Satis had a quality interior and the audacious Avantime was a rather stunning design – MPV meets sports coupe; mad but true.

But selling large Renaults is a big ask outside of France. The executive segment everywhere is very, very competitive. And the premium brands have muscled in to take more and more D/E-segment customers, who used to go with the volume makers, away. Remember the Ford Scorpio? Ford saw the writing on the wall and dropped it. Ford Mondeo was squarely targeted at fleets and the traditional D-segment customer and not aimed at the retail buyer aspirational set.

The latest Laguna has not been cutting the sales mustard. It cost quite a bit to develop and there’s not much of a return on that investment in prospect. It may well be a nice car, but that’s not the point.

As a Renault it is seen as a poor relation to the premium marques. The private retail buyer would rather have a BMW or Mercedes and those brands have become a lot more affordable and less exclusive over the last ten years. In these hard recessionary times, maybe the punters are even less likely to stray from the strictly conventional.

And the established gorillas in the fleet market can cane Laguna because, well, it’s a Renault and not a bulk-buying, low-cost but reliable fleet staple like a Ford Mondeo. Renault residuals never quite rocked, however hard Renault tried with product. And Renault decided therefore that that was a part of the market it would back away from. The poor old Laguna has been squeezed at both ends.

Should Renault even try to do big cars? It’s an interesting debate. Big cars equal large margins. If you can elevate your product mix into the upscale area, you’re going to make better profits.

Carlos Ghosn knows that well, and that was his plan with Renault. There were to be flair designs that would help to achieve that. Renault would be a premium-volume brand, best of both worlds with French design flair that could carry it off, allied to a bit of alliance industrial muscle underneath. Trouble is, the market just would not buy the premium part of that. And you have to listen to the market, even if you don’t like what it tells you and you insist that the market is being irrational.

If it wants to be irrational, it will. And you will still have to stand there and justify your strategy to the board and shareholders when you have lost a packet.

We may well be seeing the beginning of the end of Renault large cars. I can’t see Renault doing another Laguna after this sorry saga. What do you say to that Carlos, me old bean, me old China? I think I know what he would say: the future, my friend, is electric.

Q2 financial results season (over the worst?)

Your Comments

Current Laguna was always a concern from an external viewpoint, but I suspect internally it added (unrealistic) theoretical volume to the platform / module-set business case; itself pressured to fill capacity. A typical case of ‘dance of the seven veils’ business modelling. As for up-scale, the land of ‘haute couture’ clothes should be able to beget ‘couture cars’; spiritual successors of the 1920s – 1960s Avions Voisin, (Molsheim) Bugatti, Facel Vega and original DS. But the true ‘Philosophie Francais’ – so crucial to the identity of everything from a 2CV or R4 upward – is a little regarded or understood feat in RoW markets, [as you say Dave], hence the failure of Vel Satis, Avantime etc. How many customers want Albert Camus or Roland Barthes when an ‘aspirant identikit’ formulae
seems to work the world over? Citroen’s DS will be back but it will be more Nintendo DS than original ‘Goddess’ DS. Thankfully Renault has Nissan’s Infiniti to leverage,
and it should; just as the K-10 Micra gave the Figaro, S-Cargo, Pao & Be-1. So there may yet be possibilities for successful future philosophical diversions.
All must surely hope so, including Renault share-holders, to avoid a world of semiotic obsessed badge-centric cloning. “Vive la Difference!” even if it eventually comes in smaller packaging.
Turan Ahmed – investment-auto-motives, United Kingdom


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31st July 2009

First Look: 2010 Camaro

The local TV ad said, “Come by and drive the
New Chevy Camaro!” I was in the area, and so I did. The dealer had three brand
new 2010 Camaros on the lot, but all were already sold. There was a black
one, a dark gray example, and a yellow SS with black stripes. All were locked, so I
could not get a good look inside. Of course, driving one was out of the
question. And the real irony? The Camaros were going to 16-year-olds.

I had a chance to look the cars over and talk to a salesman and two
service writers. Already the stories were coming in–how they had
just replaced a red passenger’s side mirror (another 16-year-old), how
they had calls saying that the next Camaros were sold before they were
even dropped off of the transport truck, and how people would pay
anything just to have one.

My favorite feature on the new car is the
four optional gauges in the floor console. That makes a total of
eight instruments–speedometer, tach, fuel, temperature, then on the floor console, oil pressure, oil temperature, volts,
and transmission temperature.

I walked around the cars to look at how they
were put together. This is the same dealer that
had (and still has) the Cobalt
I wrote about a few months ago. All three cars were just about
perfect–the body panels fit together nicely, all paint surfaces,
including the bumpers, matched, and the paint was very smooth and even.
Then I saw a window sticker that had been removed and left on top of
the dashboard. The “bottom line” price was just over $37,000.

surprised me until I remembered that last summer’s new muscle car, the
Dodge Challenger, was about $40,000. The Camaros were much better looking
and better detailed in their finish. I would have believed that the
Challenger had already been damaged and repaired. I saw no rough paint or
misaligned panels on the Camaros as I had seen on the Mopar.

The Camaro’s grille still has not won me over. It seems
to be a square peg in a round hole design. From the brochure pictures,
I think
the dash could have been more smooth. The illustration of all the car’s
deployed airbags looks more like a fine mattress store display than a
car interior. Let’s hope we never actually get to see them deployed.

muscle car war has heated up. Whether you like bow ties, ponies, or
crosshairs, there may be no losers, just personal preferences. But if
you see a new Camaro in Williamson County, Tenn., please beware … a 16-year-old is probably behind the wheel.

visit to the dealer was unplanned, so I didn’t have a camera
along. The salesman was more than happy to give me a brochure, so I got
the images here from that.

–That Car Guy (Chuck)

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31st July 2009

Dongfeng Nissan To Build $730 Million Plant in Guangzhou

GUANGZHOU, China — Dongfeng Nissan, the joint venture between Chinese automaker Dongfeng Motor and Japan’s Nissan Motor, will meet rising demand from Chinese consumers by investing $730 million in a new assembly plant here that will boost the venture’s total annual production capacity to 700,000 units.

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31st July 2009

Kia VG

Look at the first official pictures of new Kia VG (code name). The new Korean premium sedan will make a world debut at 2010 Detroit Auto Show.



Kia Motors has today released the first images of its new premium saloon due to go on sale in Korea at the end of the year.

The new model, currently known by its code name VG, was shown in concept form at the Seoul Motor Show earlier this year and is set to replace the existing Opirus model in Korean, North American and European markets.

“VG clearly demonstrates the next stage in Kia’s design evolution and showcases our new design principle of ’sophistication by simplicity’. The exterior is a seamless blend of powerful front, sleek profile and sophisticated but simple rear lines to create an elegant and luxurious appearance,” commented Hyoung Keun Lee, Senior Executive Vice President and COO of International Business Division at Kia Motors Corporation.

There are no current plans to bring this model to the UK market.

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30th July 2009

Pricing Announced for 2010 Subaru Impreza

The 2010 Subaru Impreza will start at $17,495 for the 2.5i base model, not including a $695 destination charge. This is unchanged from the 2009 model.

The 2.5i Premium gets a $1,000 price cut compared with 2009, with a starting MSRP of $18,495. Changes are relatively minimal, but all trims do get a new grille, while the 2.5i Premium and WRX models now have standard Bluetooth capability with the navigation system.

The performance-oriented Impreza WRX models start at $24,995 and can go as high as $34,995 for the WRX STI trim level, a price that also remains the same from the ’09 models. Check after the jump for full pricing information.

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30th July 2009

Do you really care about fuel economy?

Toyota has fired the latest salvo in the battle for the title of Australia’s most fuel-efficient car, tweaking its four-cylinder Camry to get a better fuel figure.

Changes have been made to the Camry’s 2.4-litre four-cylinder petrol engine and five-speed automatic transmission to reduce consumption from 9.9 litres per 100km to 8.8L/100km.

Toyota isn’t saying so, but you can’t help thinking the 11 per cent drop in consumption is a response to similar fuel efficiency improvements made to the Ford Falcon and Holden Commodore in recent months.

Last October Holden cut the power of its Commodore engine to improve fuel efficiency from 10.9L/100km to 10.6L/100km. Holden also plans to offer a smaller V6 engine for the Commodore – the thirstiest of the locals – to close the gap further on its rivals.

Ford, which is in the middle of an aggressive marketing campaign challenging Toyota’s right to the fuel economy high ground, recently cut consumption of its XT Falcon (fitted with the more economical six-speed transmission) to 9.9 litres, matching the Camry.

Then it proceeded to shout the fact from the rooftops in an advertising campaign.

Toyota has obviously watched its rivals and listened to criticism of the Camry, which uses as much fuel as its V6 twin-under-the-skin, the Aurion, but produces much less power.

The battle for environmental superiority will hot up further early next year, when Toyota begins selling the hybrid petrol-electric Camry, then Holden and Ford respond with smaller, more fuel efficient diesel cars.

Holden will start producing its Cruze small car late in 2010, while Ford will build the Focus locally from 2011.

While all of this jockeying is entertaining, you can’t help wondering if the consumer really cares that much about saving a couple of dollars a week at the bowser.

The changes to the Camry add up to about $4 a week for the average motorist, while the difference between the Falcon and Commodore is about $2.50.

If you look at the sales figures, you begin to wonder whether consumers have forgotten about fuel economy. Sales of medium-sized four-wheel-drives went up last month, while sales of light and small cars went down.

What do you think? Is this fuel economy war a worthwhile development or an exercise in futility?

Richard Blackburn

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