Renault COO Is Reducing Production to Avoid Vehicle Discounts

Renault'sRenaultFrance, 1898 > present189 models
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Chief Operating Officer Carlos Tavares has an audacious plan to increase profitability at Renault. He disclosed plans to reduce production and increase prices to save the company in an interview with Automotive News Europe. Last year, sales were down 22%, which was significantly worse than general European auto market that was done 8%.

Tavares' plan is relatively simple. He does not want to sell cars at a discount. Therefore, he will reduce production to the point where the cars do not have to be discounted. At the same time, Tavares believes that its engineering is on par with VolkswagenVolkswagenGermany, 1938 > present98 models
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and has room to increase prices on some models. 

"I say to my guys, 'No matter what you ask me for, you will get less.' They need to try to create a pull effect on the market, making sure you don't go overboard in offering destructive discounts. This is the disease, the cancer of this industry, and not only in Europe," said Tavares.

Renault's future plans hinge on not building too many cars because that forces the company to offer discounts to get them sold.

"I will not make cars just for the sake of giving huge, stupid amounts of money to discount the cars that I already built," said Tavares.

In addition to reducing discounts, Tavares believes that Renault's newest models are on par with Volkswagen in terms of quality and engineering. Therefore, he is slowly increasing prices of the company's cars. Renaults are already more expensive than CitroënCitroënFrance, 1919 > present94 models
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, OpelOpelGermany, 1863 > present85 models
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, FordFordUnited States of America, 1903 > present92 models
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and FiatFiatItaly, 1899 > present159 models
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, but Tavares’s biggest goal is to put them on par with VW. 

"At the end of 2013 the gap [in pricing] will be lower because the quality of our cars is as good – if not better – than VW cars based on evaluations by consumers in Germany. That's point No. 1. Point No. 2 is that we are fixing, step by step, the lack of appeal of our design. We started with the new ClioRenault Clio Gen.4France, 2012 > present92 versions
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, then the ZoeRenault ZoeFrance, 2012 > present7 photos
and now the CapturRenault Captur Gen.1France, 2013 > present37 versions
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," said Tavares.

He says that Renault's are equal to VW in terms of quality, design and emissions. There is no reason that they should be priced lower. 

"If you have the right design, quality, appeal, functionalities, over time your price will be at the same level as your competitors," said Tavares.

Source: Automotive News Europe