Renault looks to luxury sector

 

WANDER INTO Brown Thomas some afternoon and check out the Hermés scarves, the Louis Vuitton luggage or, if you’re feeling a bit Haughey-esque, the Charvet shirts. We cannot get enough of French luxury goods, and the great brands of Paris account for around €13-billion worth of high-end sales very year, according to industry watchers Bain & Co.

When we need a definition of fashion or style, we turn to Lacoste, to Givenchy, to Chanel. German designs, by comparison, tend to the rigid, the upright, the practical. You’ll find them mostly in the kitchen section . . .

Stick four wheels and an engine into the equation though, and things are very, very different. When it comes to building and selling premium cars, the French are ambitious, to say the least, but sadly unable to compete with the sales steamrollers from Germany. BMW, Audi and Mercedes rule the premium car roost, with even the likes of Jaguar and Lexus struggling at times to keep up. That leaves precious little in the way of sales or even hope for Renault, Citroen or Peugeot.

That doesn’t seem to be stopping them having a go though. Renault is due any day now to officially announce its return to the luxury car market. Last month, Renault’s chief operating officer Carlos Tavares revealed that La Regié was thinking of breaking back into the premium market with a new brand called Initiale Paris.

The idea would be to start with upscale versions of the Clio, Megane and Scenic before introducing full-on bespoke models by the end of the decade. Ironically, some of these models could actually use Mercedes parts, thanks to a joint agreement between the Renault-Nissan alliance and Daimler-Benz to share parts, chassis and some production facilities.

Renault will be treading very, very carefully though as its last foray into luxury land was an unmitigated failure. The Vel Satis, launched in 2002, was supposed to be an alt-BMW, a car obsessed with true luxury and comfort, where its German rivals were focusing on hard suspensions and lap times. It was certainly comfy, but it failed spectacularly to click with buyers and sank almost without trace.

Even the mighty original Citroën DS never sold very many cars. Yes, 1.5-million were built but that was more than a 21-year production lifetime, from 1955 to 1976, and seeing as Michelin basically bankrolled its initial development, that almost doesn’t count. Developing its luxury successor, the CX, bankrupted Citroen and drove it into a shotgun marriage with Peugeot.

The sad and inescapable fact is that big French cars just don’t sell well enough, as the Peugeot 407 Coupe, Renault 25 and Safrane, Citroën XM and Peugeot 605 and 607 all found. When buyers are laying down that much money for a car, they basically want German and little or nothing else. Take the Citroën C6. A stunning, beautiful, iconoclastic car. Loved from afar by many. Supposed to sell 20,000 a year. Has struggled to sell 20,000 since it was introduced in 2006.

The thing is that Renault needs a successful luxury brand. Its traditional mass-markets are eroding fast and luxury car sales are growing.

It has a healthy chunk of the burgeoning cheap-car market cornered with Dacia, but a proper, profitable, high-end brand would go a long way to securing Renault’s financial future.

Citroën has had recent critical and sales success with the DS premium brand (albeit mostly with the small, affordable DS3) which should give Renault some hope, but making the jump from Hermés to Hot Wheels is still going to be a struggle for any car with a Paris postcode.

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