Dongfeng Renault in dilemma of weak capacity and lack of dealers

 Gasgoo.com (Shanghai July 22) - With a reputation in Europe, Renault has been reduced to an unpopular brand in China after more than twenty years of struggle in the country.

And Dongfeng Renault currently sticks into a dilemma of lack of dealers and the weak production capacity.

With low sales in China and poor reputation, Renault is faced with being marginalized. Renault reported imported vehicles sales of 2,545 units in China in May, a 42 percent year-on-year decrease. And Renault’s sales in China only accounted only 1.3 percent of overall global sales in 2014.

Troubled with aging product line and dealers’ difficulty in making money, Dongfeng Renault can hardly accomplish the annual sales target of 150,000 units in 2016, with the recent annual sales in 2014 of 34,000 units.

Though the company has introduced eight models in China, but almost all the sales responsibility was taken by only one model, Koleos, which has been introduced seven years ago into China and has become an aged model.

In June, Captur, the top-seller overseas, was launched in China in June as part of Dongfeng Renault’s preparation for the domestic production of Kadjar SUV. But compared with Captur’s rivals like Bevel form GAC Toyota and Hyundai ix35, the model was introduced a little late and lack competition in lack of domestic production.

Thus, there existed no passengers produced in China from Renault. Dongfeng Renault has taken a big risk in choosing the unknown Kadjar SUV for the first model to be produced in China in a large scale. This will increase the joint-venture’s capacity, but the situation won’t improve with its problem with dealers.

The currently dealers are 106, which can hardly bare the large capacity when the Kadjar will be produced in Dongfeng Renault’s Wuhan plant with a capacity of 150,000 units.