Renault plans compact SUV for China, Europe

Mathieu Rosemain
Bloomberg News

Renault SA joined a crowded field this week, unveiling a compact sport-utility vehicle meant to build the company’s presence in China and Europe.

The new Kadjar crossover, the French company’s fourth SUV, is scheduled to reach European dealers in mid-2015 after its presentation to the public at the Geneva Motor Show, Renault executives said at a press conference in the Paris suburb of St. Denis. The vehicle will be Renault’s first made in China.

“We’re here in the field of fake SUVs that’s so fashionable today,” said Philippe Houchois, a London-based auto analyst who recommends buying the shares. “It’s a good time to launch this vehicle to fit in with Renault’s strategy to grow abroad, especially in China,” with SUVs usually providing higher margins than standard cars.

Renault is introducing five vehicles in 2015 to add sales and market share worldwide. The carmaker, based in Boulogne-Billancourt near Paris, teamed up with Dongfeng Motor Corp. last year on a project to make cars jointly in China starting in 2016. The Kadjar will be built initially at Renault’s plant in Spain and as of next year in China, Chief Executive Officer Carlos Ghosn said today.

SUVs’ proportion of China’s light-vehicle market will probably widen to 22.4 percent this year from 17 percent in 2013, Tim Urquhart, a London-based analyst at IHS Automotive research company, said in an email. The models’ market share in Europe is likely to increase to 21 percent from 19 percent in the period.

“It’s the market that is growing at the fastest pace in the world today, with 1 vehicle out of 5 sold,” Jerome Stoll, Renault’s chief performance officer, said at the press conference. “We had to increase our presence there.”

The Kadjar will share at least 60 percent of its components with Japanese partner Nissan Motor Co.’s Qashqai, Europe’s best- selling SUV, Bruno Ancelin, Renault’s product-planning and programs chief, told reporters.

The model joins a lineup that includes the Renault brand’s Captur SUV, a smaller vehicle, and the larger Koleos, and will compete with Volkswagen AG’s Tiguan and PSA Peugeot Citroen’s 3008. Groupwide, Renault’s best-selling model is the Duster SUV, sold under the Dacia badge in Europe.