PARIS – Renault’s Modus became the top-selling small minivan in western Europe in the first quarter. But the French carmaker is cutting production of the model for the third time since its launch last September.
In the first three months of 2005, sales of the Modus overtook those of last year’s segment leader, the Opel Meriva.
If the Modus maintains its current sales pace, full-year sales will be 211,156 units.
That’s way below the 300,000 units of annual capacity available at Renault’s plant in Valladolid, Spain, where the Modus is the sole vehicle produced. Renault has not announced sales targets for the Modus.
The French carmaker has scrapped one of the three shifts at the Valladolid plant. It also laid off 200 temporary workers.
Production will be reduced to 900 units a day at the end of this month from 975.
Production had already been cut to 1,100 units a day in March from a peak of 1,275 at the car’s launch seven months ago.
Renault says it is happy with sales of the small minivan.
But Patrick Blain, Renault sales director, was quoted in the French press as saying the Modus’ share of sales in the company’s small-car segment, where it is placed next to the Clio and Twingo, are a “bit weaker than expected.”
He said the average sales price for Modus models is higher than anticipated as customers are buying well-equipped versions.
Each time it cuts Modus production, Renault puts on a brave face. “We are striking the right balance and matching sales,” Georges Douin, Renault’s head for product planning and international operations, said in early March.
Renault hopes that the Modus will repeat the success of its Scenic medium minivan, which is the top-selling medium minivan in western Europe.
But analysts believe Renault may be too ambitious.
Colin Couchman, a UK-based analyst with Global Insight, said the Scenic attracted buyers from the upper-medium segment but consumers are not downsizing to a Modus from a Megane or other lower-medium segment car.
At E12,200, critics say the Modus is too expensive. Former Renault CEO Louis Schweitzer last month admitted the Modus’ price was “a bit high.” He said cheaper versions will be launched.
The Modus’ rivals cost more – the Opel Meriva sells at E13,710 and the Ford Fusion E13,950. But a Clio small car costs E10,200 and a Megane lower-medium model sells for E13,990.
– Alex Ricciuti contributed