Groupe Renault in China: interview with François Provost, Head of operations for the China region

by Groupe Renault

Following the announcement of the opening of the Renault Design Center Shanghai and the reveal of the Renault City K-ZE at the Shanghai motor show, we meet François Provost, Head of operations for the new China region. He gave us an update on the outlook for the Chinese market and Groupe Renault’s ambitions.

Until March 2019, Groupe Renault was organized within 5 regions. So why did we decide to dedicate one region to China? 

Interview de François Provost - xx - Groupe Renault
François Provost, Head of operations for the new China region - Groupe Renault.

François Provost -  Our objective, as established by the Drive the Future strategic plan, is to sell 550,000 per annum by 2022. This is highly ambitious, but our priorities are clear and the creation of a region dedicated to the market is a strong indication: China offers genuine growth opportunities. 

Remember that in 2015, we had no sales there. In 2018, we sold 216,699 with 0,8% market share. More specifically, 63965 were sold under the Jinbei brand and 52,734 vehicles were sold by DRAD. DRAC is to renew its range, with new vehicles that can reach the market between now and 2022, of which at least three electric. Renault-Brilliance Jinbei will sell seven vehicles, of which three electric. 

What is the current trend in the Chinese automobile market? What are its mains characteristics?  

F.P. - As we had anticipated, the market is on a down trend at the moment. This is the first time in 20 years that the market has contracted. However, in the medium term and over the next 10 years, the market is set to grow by 3-5% per annum. This may seem low compared with previous years, but the volumes are huge. In 2018, 28.1 million new vehicles were sold in the country. 

A major characteristic of the Chinese market is that it is a highly competitive market. For example, the Kadjar has over 100 competitors. The regulations are also very strict, indeed the strictest in the world in terms of gas emissions.

Finally, China is a market in which the technologies for connected and autonomous driving are very much encouraged and demanded by customers. Don't forget that Chinese new car customers are an average age of 37 versus 50 for European customers. Demans are much higher in terms of connected services.

Learn more about the Chinese market 

How is Groupe Renault expanding in this competitive market? 

F.P. - Groupe Renault started operations there in December 2013 by setting up its first joint venture dedicated to the sale of passenger vehicles, DRAC. In this venture, we became partners with Dongfeng, who was also already in a partnership with Nissan. This was very important because we immediately obtained access to competitive technologies and suppliers, both in terms of costs and quality. In March 2016, we started selling the Kadjar and then the Koleos in November 2016, both manufactured in the Wuhan plant in the province of Hubei in the center of China. Our customers appreciate these two SUV, but the Renault brand is still relatively unknown in China. Developing awareness for the brand and the sales network are our two challenges. DRAC is already in the Top 3 in terms of customer satisfaction, the Wuhan factory is strong in terms of QCTP in the Alliance. 

In August 2017, a second joint venture was set up between Renault-Nissan Alliance and Dongfeng: eGT-NEV develops in Wuhan then produces in Shiyan affordable electric vehicles. Its first model, an A-segment urban SUV, the Renault City K-ZE, has just been revealed at the Shanghai motor show and will be sold by DRAC in China. This vehicle will become a global vehicle for Groupe Renault. 

And, in December 2017, a third joint venture was established with Brilliance for the development, production and sale of LCV under the Jinbei, Renault and Huasong brands. This venture known as Renault-Brilliance Jinbei is located in the city of Shenyang, a traditional industrial base in the north of China. 

Learn more about Groupe Renault involvement in China

Can you tell us anything else about the Chinese electric vehicle market?

 

F.P. In 2018, the Chinese market for new energy vehicles (NEV) represented sales of 1.3 million units, i.e. 3.6% of the Chinese automobile market. Due to regulations, this should rapidly exceed 5%. For example, a regulation requires the production and sale of a minimum number of NEV and after 2020, the portion of total vehicles will be higher than 10% 

The fact that Renault has been a pioneer in electric vehicles since 2011, that it has a full range and is a recognized leader in Europe (22.2% market share in EV) is a major strength, notably in terms of image. For example, the Renault City K-ZE was developed in total accordance with Renault quality standards. I am convinced that this will give us an edge on Chinese and European rivals. 

Learn more about Renault City K-ZEour new electric and compact vehicle with a sporty design, dedicated to the Chinese market.

 

sum up

To achieve the objective set in the Drive the Future strategic plan of selling 550,000 units by 2022, a region dedicated to China has just been set up on April 1, 2019. 

  • With 28.1 million vehicles sold in the country in 2018, China is the globe’s number one automobile market. 30% of all new vehicles are sold there. 
  • In 2018, China was the Group’s fourth biggest market. 8,000 men and women work there for Groupe Renault. 
  • Renault is growing in China via its joint ventures: 
    - Dongfeng-Renault Automotive Company (DRAC) sells Renault brand passenger vehicles; 
    - eGT-NEV develops affordable electric vehicles; 
    - Renault-Brilliance Jinbei covers LCV. 

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