Renault’s chief operating officer Carlos Tavares says he expects the company’s UK division to return to profitability this year as it begins to feel the benefits of the restructuring plan put into action 18 months ago.
Tavares said the French manufacturer’s UK division was preparing to enter stage two of its recovery, following on from the first step which was initiated in December 2011 and included a dramatic cull of cars such as the Laguna and Espace from the model line-up.
The next phase involved “leveraging the quality and appeal of the great product that we are bringing to the market with the new Clio, Captur and Zoe”, and Tavares said Renault had been “energised” by the positive reaction those cars had received.
He was also adamant that all of the European divisions should focus on building Renault’s reputation for making quality cars and steer clear of “unhealthy practices”, such as heavy price discounting, which continue to hamper the profitability of European car makers as they try to increase sales in a challenging market.
“We do not want to be in the discounting industry – we want to be in the value industry, which is different,” he said.
Tavares stated that sales of 75,000 cars and vans per year was a target that would make Renault's UK operations sustainable. It is believed that Renault UK has been loss-making since 2006. Last year just over 40,000 cars were registered as well as around 14,000 vans. The emerging Dacia brand, launched in the UK at the start of this year, should add more units to 2013's end-of-year total.
He added that an improving financial outlook did not necessarily mean that the domestic importer would consider re-introducing any of the previously axed models.
Such a decision, said Tavares, would be left to Renault UK’s managing director Ken Ramirez, although he added: “What we have found in the last few years is that having too many cars can be highly counterproductive."