Renault Looks to New Meganes for Boost

09/20/96

Reuters reported that French carmaker Renault SA hopes that sales of its new mid-size car--the Megane--will give the company enough of a boost to keep it moving forward as it begins to recover lost market share.

Renault chairman Louis Schweitzer unveiled the new Megane models, the Classic sedan and the Scenic, almost one year after the company introduced its first Meganes, three- and five-door hatchback coupes.

Last November's launch of the six-car Megane family was intended to increase Renault's share of the profitable market for mid-sized cars. In a market crowded with novelties, however, the strategy did not work. Renault lost ground in both France and Europe.

During the first half of 1996, Renault's share of the European car market shrank from 10.6 to 9.7 percent, year-on-year. Last week, Renault reported a $30.67 million drop in first-half profit. Nonetheless, Schweitzer says that the company has begun to turn around its downhill slide. He indicated figures for July and August that show Renault increasing its European market share from 10.1 percent in 1995 to 10.4 percent this year.

Although Schweitzer forecasts a loss for the year, he indicates that the Megane family has helped the company increase sales of midsized cars in France and Europe. Renaults share of the mid-size car market in Europe rose from 19 to 30 percent, year-on-year, in July and August, while its share of the French market rose from 17 to 24 percent. The company invested 2.3 billion francs in the new Meganes, and expects them to further expand market share.

The Scenic is a monospace, single-body car with the proportions of a minivan. It's eight inches taller and slightly wider than last year's five-door Megane hatchback, but no longer. It offers a more spacious interior and more flexibility with reclining and removable back seats. The Scenic also includes a variety of storage spaces, including a drawer under the front seat, which, in the words of vice president for product planning Remi Deconinck, will make it "a nightmare for customs officials."

The Classic is a conventional sedan with the elliptical lines that characterize all the Meganes. Deconinck said that it boasts a larger trunk than the Cadillac Seville, .

Sixty percent of the parts of the Classic and 40 percent of the parts for the Scenic are also used in the hatchbacks. Schweitzer said that, in addition to common parts, both cars will carry a price tag under 100,000 francs ($19,417). The pair enters the French market on October 1

Renault is preparing to roll out Megane convertibles and station-wagons based on the same platform.

Paul Dever -- The Auto Channel