Sales are half mast in France for the entire auto industry. With a year down in June of more than 14%, and a potentially disastrous 2022, no brand has been left out and Renault is no less. However, in Diamond Seat, humor prevails, without the need to spray laughing gas into the air ducts. What is the secret of this fun? Politics, the famous Renaulution wanted by President Luca de Meo and whose first effects are beginning to be felt.
Fewer fleets, more people
Because in the aviation plan that was drawn up two years ago, certain aspects have already been applied, other than the electrification of the entire brand and its split into two separate companies. On the one hand, they are interested in the fact that to some extent abandon the market for the company’s fleets, and therefore the preference for ordinary individuals. But there is another point that Renault seems to abandon, or at least not frantically use anymore, these are entry-level small cars, inexpensive, but also not very profitable for the manufacturer, which was its historical specialty ..
But why do we ignore companies? They generally buy fairly well-equipped cars in the higher segments, which, in principle, suit the manufacturers. Except that the trusts significantly revamped their fleet last year, only to ditch the diesel that took over and get PHEVs well below taxes. Additionally, companies never buy at list price, eroding brand margins.
So since the beginning of the year, Renault has focused on individuals. And it works. Sales through this channel increased 13% over the past six months and improved 4.1% in June alone. But how do we dissuade them from buying cheap small cars? By significantly increasing the price, as in the case of the Clio, which saw its base price increase by 1,200 euros.
It remains to convince them to invest in expensive cars. LOA funding contributes strongly to this. Consequently, the all-new Megane Electric got 20,000 orders in three months. Even the small Clio sells for 25% in the electronic tech version, just like the Captur. The most expensive cars to buy that offer a better margin for the manufacturer.
Fast Track Effect
But it’s also about getting consumers to buy bigger and therefore more expensive cars. Renault’s solution to achieve this is called FastTrack. By ordering his Arkana in this way, the customer is guaranteed to deliver it within 30 days. A huge advantage in these times of scarcity is when certain models, from certain brands, require delivery times in excess of a year. Of course, only the most expensive models are affected by ultra-fast delivery, in which case the RS line ends.
As we can see, Diamond publishes its entire strategy to increase its margin, even if it means reducing its sales. A winning short term strategy. But what will happen in the future? The average purchase price for a new car in France is now close to €26,000. If the Clio e-tech at €23,500 falls into these criteria, the same does not apply to the Arkana Fast Track at €38,630 or the Megane e-tech electric at €35,200. A new deal will push more and more motorists towards used cars, due to the lack of possibilities. But in order for the available fleet of used cars to be made available, these models must first be sold brand new for the first time.