The French connection
French-manufactured products are sometimes thought of as quirky, yet today around one in four people who buy a van through a dealer in Australia choose a Renault product. Steering the Renault commercial range from a niche towards becoming a major player has been LCV Product Manager, Lyndon Healey.
Following his time at Nissan Parts and Aftersales, Lyndon Healey commenced working with Renault in 2008 in a technical and marketing role with the Parts group, and went to vehicle marketing for Renault’s light commercial vehicles (LCVs) in 2011. Prime Mover sat down with Lyndon to talk LCVs, the role of dealers, and inbuilt perceptions about French brands.
PM: Do you think the country of origin is a negative?
LH: No. The strategy was very much to create a road presence and give people opportunities to actually get behind the wheel. Renault vans do particularly well when compared to our competitors, in that they are comfortable to drive and they handle well. The only way to get those benefits across is to get people behind the wheel.
PM: This is where your dealers come in?
LH: The Australian van market is not all that big, with only around 30,000 vehicles per year, of which 20,000 or so go through dealers. We sell more vans per dealer than any other van brand in the country and, even though we only have a relatively small network of 56 dealers, there is quite a lot of expertise within those dealerships.
PM: You’ve promoted the dealers as LCV experts, rather than as the LCV being the second-stringer to passenger vehicles. It’s obviously worked, so what was the rationale behind that?
LH: If you think about all of the van brands in this country, they are effectively retail dealers who also sell vans. If you talk about truck brands, say Scania or Volvo or Isuzu, however, they understand what it takes to establish a commercial brand and recognise that their aftersales departments are crucial to selling subsequent vehicles in the future, after the initial sale. It’s always the challenge with a retail brand such as Renault to push that agenda all the time. Currently, commercial vehicles make up nearly 50 per cent of our sales in this country, and the dealers are well aware of the importance of LCVs to Renault’s overall business performance. They’ve really embraced commercial vehicles as a way of making their Renault dealership even more viable. Renault Australia has the highest proportion of LCV sales of any Renault operation in the world.
PM: Is that a balance you want to sustain?
LH: Typically, around the world, its around 10 per cent commercial, 90 per cent passenger. Here it’s around 50:50. I’m happy with the way our brand has evolved in the past year. We sit around third behind Hyundai, and I think we’ve done a pretty reasonable job of establishing Renault as a viable commercial brand.
A good example is the Master’s market share, which in five years has gone from about 2.5 per cent to around 22 per cent of its category.
We don’t have currently have an automatic available in a Trafic, which limits us from a fleet perspective – but we now have a confirmed production date, and we’ll see them here later in 2019. Our corporate fleet sales only make up about seven per cent of our total business, whereas Toyota’s is around 60 per cent.
PM: Is the Renault Alaskan ute still a probability for Australia?
LH: Our dealers are enthusiastic about the ute but the relationship with Nissan makes it difficult. It’s effectively their product and naturally they’re very sensitive about protecting their Navara market share. With the Alaskan, our volume aspirations were always going to be reasonably modest and, until we can come up with a proposition that we are happy with and we are sure that we can commit to a volume, we won’t do it.
PM: Motorhome cab chassis is an area where Renault seems to be doing well.
LH: We’ve seen a real switch from our customers away from cab chassis to our platform cab, which is effectively a front-wheel-drive long-wheelbase van that has had the top, sides and rear cut off, leaving a low floor. It’s inherently super easy to drive and feels like a big car. The motorhome manufacturers’ customer demographic is changing, and they’re getting a lot of older single women who are buying these things with the intention of travelling and doing the driving themselves.
PM: How’s the uptake of the Kangoo ZE electric van?
LH: Originally we thought it would be for fleet customers only, although there have been a few retail customers. The reality is, unless you’ve got some compelling reason why you want to buy electric, the current business case doesn’t stack up unless you do more than 15,000km per year.
PM: The online shopping phenomenon continues to fuel the courier business. How does Renault approach that market?
LH: You go to a courier depot and there are 100 or 200 couriers there – if it’s the business model where they are buying their own vehicles, it can be quite an effective way to quickly establish yourself. The only problem is you’ve got to be 100 per cent sure that you can look after them, because once you upset a couple of them you can guarantee that everyone will know about it real quick.
We already see that those segments are being heavily driven by the shift from traditional store-front shopping to online shopping, especially with younger consumers. We’re selling more big vans to retail-type customers, who perhaps are buying themselves employment with a small business that needs a van. Fleet buyers are more sophisticated, and they understand the cost of running a van is not what you pay in monthly instalments.
PM: Crew vans with a second row of seats seem to be gaining popularity. Who is buying them?
LH: With the Trafic crew, we were targeting about six per cent market share and are selling around 11 per cent. The interesting thing about that vehicle is that since it became available here, 86 per cent are the top specification, because probably about half of our Trafic crew sales are going to people who came out of a dual-cab ute. The reason they buy high spec is that they are coming from a passenger vehicle that has a reasonable level of equipment. They take a look at a Trafic and realise they can have all of that for thousands less, plus an interior that’s just as nice, it’s going to use less fuel and it’s more secure for their tools in the back.
PM: Renault commercial is known for its long and generous warranties. Is it still seen as important across the range of buyers to have that level of cover?
LH: For us it’s important, because most of the time we’re not fighting against reality – we’re fighting against perception. For example, most people will not know that the Mercedes-Benz X Class has a Renault engine in it, or that the Nissan Navara has a Renault engine. Most people wouldn’t know that a Mercedes-Benz Vito has a Renault engine. We need to demonstrate our own confidence in our vehicles.
The value part of the equation includes that we don’t make safety equipment optional – it’s just standard across the range.
PM: Any industry predictions for the next couple of years?
LH: I think we’ll continue to see growth, particularly in the larger mid-sized vans and the big vans. Once again, I suspect it’s driven by that same imperative of people being more interested in easy driveability than maximum payload. Some of our fleet customers, especially those doing online home delivery, have said it’s much easier to train a good customer-service person to drive a van or a light truck than it is to get a truck driver to give good face-to-face service. So they are looking for something that is really easy to drive, and we’ll continue to see the comfort of our vehicles being a factor that will help push our brand along.