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Renault gearing up for 2017 bakkie debut in ‘competitive’ SA market

27th November 2015

By: Irma Venter

Creamer Media Senior Deputy Editor

  

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Renault South Africa (SA) will introduce the Alaskan one-ton bakkie onto the local market in 2017, says new CEO Nicolas de Canha.

“We hope to build it here, as it shares a platform with the new Nissan Navara.”

Nissan SA should announce by the end of the year whether it will produce the new Navara at its Rosslyn plant, in Pretoria.

Globally, Renault holds a 43.4% stake in Nissan, while Nissan owns 15% of Renault shares.

Assembling Renault’s Alaskan pick-up locally will, however, not transform Renault SA into a high-volume local manufacturer, says De Canha.

“We will buy the units from Nissan at an agreed price.”

The domestic one-ton bakkie market is “very competitive”, he adds.

“Our expectations on sales are very realistic. We know we need to climb a big hill.”

Local assembly will secure the benefit of rand-based pricing, notes De Canha.

The bad news for bakkie fans is that De Canha is not sure whether Renault SA will be able to introduce the French brand’s new three-quarter-ton bakkie, the Oroch, onto the local market.

The Oroch, a smallish double-cab bakkie, is built on the Duster platform.

“We would like to get it, but it is produced in Brazil and we need to figure out a cost-effective deal to get it here,” says De Canha.

What is certain, however, is that Renault’s Kadjar sports utility vehicle will make its debut in this hotly contested segment by the end of January.

It will compete with the Nissan Qashqai and Kia Sportage, for example.

Renault SA is also “optimistic” that it can introduce the new A-segment Kwid onto the local entry-level market.

De Canha says the entry-level market has become increasingly important in South Africa, especially as the weak rand has pushed yearly price increases well above inflation.

“Thirty per cent of customers cannot pay more for a car than they did five years ago in nominal terms. This means 30% of customers [cannot] keep up with price increases.”

While some wage increase deals in South Africa have been above inflation, a significant number of salary earners have seen close to zero per cent increases in their income, he notes.

De Canha is positive that Renault SA can increase its sales to 23 000 units in 2016, up from 2015’s estimated 19 000 units, on the back of the brand’s “very fortunate” new product line-up.

Sales in 2014 reached 18 800 units and 11 000 units in 2013.

The weak rand pushed Renault SA into significant price increases that muted sales in the first half of 2015, says De Canha.

Renault SA is 40%-owned by Renault in France, and 60% by the JSE-listed Imperial group.

The brand has 59 dealers across South Africa.

De Canha is wary of opening more dealers in what is currently a tough domestic market.

Running a breakeven single-franchise dealership in a metro requires 40 new-vehicle sales and 30 to 35 used-car sales a month.

“Once you have the volume, you can open more dealerships.”

One of De Canha’s main goals in his new position – he took over from Niall Lynch on November 1 – is to ensure that Renault SA has “positive, professional and enthusiastic” dealers and salespeople – more iStore-type, knowledgeable, competent people who respect their job as a career, rather than those focusing on the hard sell only.

Customers will visit between 1.7 and 2.2 dealers before making a purchasing decision, he notes.

“They will not come back and interact with you over and over again. They will walk in only once and they will not put up with bad service. We need to respect the customer.”

De Canha is also aware that Renault SA’s customer base is changing faster than the demographics of its salespeople.

“Around 45% of our clients are black, Indian or coloured, so our industry has to change.

“Every customer, man or woman, deserves our best pitch.”

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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