NEW YORK - Renault will once again sell its cars in North America, for certain under its own badge in Mexico, and perhaps rebadging its products under the Nissan brand in the United States, Renault Chairman Louis Schweitzer said last week.
'You might find vehicles that look like Renault marketed in the U.S., but you will not find the Renault brand. There could be cross-branding,' Schweitzer said at a meeting here of Renault and Nissan executives and journalists.
Renault products likely would be changed to fit U.S. tastes, Schweitzer noted, acknowledging that Renault's last attempt here, in the 1980s, failed.
BRAND IMAGE IS POOR
'French culture tends to be quite specific,' Schweitzer said. 'Renault's brand image in the United States is poor. That's a fact. We were very unsuccessful in trying to manufacture Renault cars for the U.S. market because the product was not good.'
Because companies are reducing and combining their vehicle platforms, there is a good chance a Nissan or Infiniti vehicle sold in the United States could come from a Renault-designed platform, have a Renault powertrain, and even be influenced by Renault design, Renault and Nissan executives agreed.
'Getting European-spec products to U.S. standards can be done in a year. So why sell through the Renault brand when Nissan is linked to good quality and engineering, even if they are a bit bland? If we can add some pep to the Nissan brand, it's a win-win situation,' Schweitzer said.
However, Schweitzer said the two companies' design teams will not work together on products.
'It is like whiskey, if you blend it too much. You don't want to make it too mellow,' Schweitzer said.
The lack of overlap in the two companies' market presences was a convincing point for Schweitzer as well. For Renault to regain access to the North American market alone from square one, Schweitzer reasoned, the company would have to spend at least $2 billion to build a dealer network, develop a line of cars and market them successfully.
'This is not about two companies working to merge into one company. That would be difficult, time- and energy-consuming. We are working on uniting our forces to develop and sell cars, not merging our corporate structures,' Schweitzer said.
PLANS FOR MEXICO
Schweitzer confirmed Renault will return to Mexico under the Renault name, but using Nissan's established distribution, supplier and dealer network there. The underutilized Nissan factory in Aguascalientes, Mexico, may be used to build Renaults, Schweitzer said.
A possibility of closing extraneous factories is real, since Schweitzer prefers to run fewer plants at three shifts per day instead of more plants for two shifts a day. Schweitzer also warned Nissan's supplier ranks that they may be in for a 'Darwinian' purge should they be seen as too weak.
One promising note: Nissan's North American operations, which wrote off $676.7 million in off-lease losses last year, and which were slated for a $43 million loss for the year ending March 31, 1999, will finish in the black instead - mostly because of aggressive reductions in inventory, said Minoru Nakamura, Nissan North America president.