My report yesterday about Renault’s plans to walk away from the large car market – as well as abandoning the Laguna – caused some consternation in Paris.
It was not inaccurate. Indeed, the company’s Chief Financial Officer Mr Moulonguet was quite plain about the plans for the company’s large car factory and the fact that it has written off a 150m euros in development costs for the now-postponed new Espace.
However, the company has issued a list of ‘clarifications’ in light of our meeting with the CFO.
Renault says ‘there will be a new-generation Espace. The project is postponed but not cancelled.’
It points out that it has a raft of upmarket technology, including the new V6 diesel engine and 4Control chassis with four-wheel steering. It also points out that Renault’s Korean Samsung arm builds 76,000 SM5s and 15,000 big SM7s each year.
However, the e-mail makes a subtle distinction between ‘large’ and ‘luxury’. It says ‘we have good reason to remain confident about the future of our luxury range’.
And even though Renault has had considerable success with the budget Logan and Sandero models, it ‘would like to remain a volume car maker, i.e. offer clients a full range of vehicles from entry-level to the luxury segment’.
Now Renault’s bosses define luxury as any car costing over 27,000 euros, and they include the Koleos, Laguna, Laguna Sport Tourer and the Laguna Coupe in that definition.
But reading between the lines, I think Renault has decided that while it will offer ‘luxury’ cars, that’s not the same thing as ‘large cars’.
Indeed, at yesterday’s financial results in Paris, Renault boss Carlos Ghosn suggested that the new car market might ‘permanently change’ after the global recession ended.
He hinted at a bleak future for large – if not luxury – cars.‘We will have to adapt to new market conditions, re-think individual mobility and adapt to the new trends. But we also think [in the medium to long term] that the oil price will remain high and there will be increased environmental concerns.’
Renault has form with the concept of smaller cars with luxury interiors. Anybody remember the leather-trimmed Renault 5 Monaco or the plush Clio Initiale?
My guess is that the Espace will eventually be re-invented, but as a rather smaller car than today’s model.
And it’s interesting to think that within four years a major car maker such as Renault thinks that it will not need a car even as large as the Laguna as fuel economy and environmental regulations start to bite.