It’s no secret that the Renault-Nissan alliance has very high expectations with electric cars. They want to be the world leader, and the group has already invested more than 4 billion dollars following that goal. I have no doubt they will reach it, and that the 2 brands will sell more electrics than anyone in the foreseeable future. But that’s only one part of the story.
Renault has lost some market share this year in France, its main market. Overall, the French market is down 2% in 2010 (January to November) and Renault is down 3%. This slide will keep on going until the launch of the Clio’s fourth generation in early 2012, as Renault latest’s mainstream sedan, the Laguna, and its SUV, the Koleos, failed to convince many buyers. Renault has sold more than a half-million cars in France last year, it will below that mark this year, and the next, with the only thing that could reverse this failing trend in 2011 being the availability of 2 electric models: the Kangoo and the Fluence.
It’s an interesting proposition as electrics would most likely bring new customers to the brand. With very different pricing and performances, few people would hesitate between the gasoline and the electric version of the same car, as Renault will find out next year with its Kangoo and Fluence models, but the question about their sales potential remains unanswered. Looking further, will those sales compensate for the loss of market share in regular gasoline and diesel models?
Some people are questioning Renault’s strategy, saying it’s some kind of gambling, and it’s difficult to prove them wrong. In the video, Mr Ghosn compares the auto industry to the mobile phone industry, giving the example of the huge change we’ve all seen between today’s latest smart phones and those of 20 years ago. It’s a very bad example to me. Because a new mobile phone is much easier to design than a new car, and the economies of scale are all different.
A auto manufacturing plant is a huge industrial site, with thousands of workers, dozens of suppliers and an organization that required several years to create, and several other years of production of an unchanged product line (or little changed) to regain the investment. I understand an electric car can be easier to update via software changes, but retooling such as redesigning a bumper, won’t get any faster with electric cars. It’s not like the mobile phone industry where you see the players launching new models every 6 months, and it’s very surprising that the comparison was made by an auto executive.
Mr Ghosn is very pushy about electrics, I understand him, and I pretty much believe him. I want him to win, and the electric car to be successful all over the world, but that can’t hide the fact that he’s gambling, and that he has a lot to loose.