Daily Edition: Dec. 5, 2005 Page 3

December 5, 2005

The interest in the luxury sector is caused by a need to bolster Renault’s profits. In the first ten months of this year, Renault has seen its share of the European market slip from 11.3 percent to less than ten percent, with sales of its best-seller, the Megane, dropping by eight percent and its large family sedan, the Laguna, losing 20 percent despite a recent facelift.

Ghosn is due to reveal his strategic plan for Renault’s future on February 6, 2006, and it will need to address the problems that have surfaced this year to spoil what was a bright sales performance. The Mégane continues to sell well, as does the newly redesigned Clio, recently elected European Car of the Year. The Twingo citycar, mainly sold in France, holds its own in the sales charts but it is old and nearing the end of its lifespan. However, Ghosn has put back the launch of a replacement, due next year, which he did not consider good enough.

The Modus, positioned between the Twingo and the Clio, is a result of Renault’s alliance with Nissan, and has much of the Micra in its gene pool. It has not, however, been a good seller in its first year of life, and sales forecasts have been revised downward drastically. In the family sedan category, the Laguna has not been a great performer since early examples were blighted by electronics problems. Even the Espace, the pioneer of the minivan revolution, is losing sales as the niche it once had to itself becomes overcrowded.

2002 Renault Vel Satis

2002 Renault Vel Satis

Enlarge Photo
2002 Renault Vel Satis

2002 Renault Vel Satis

Enlarge Photo
The major problem is the top of the range, where the radically styled — and strangely named — Vel Satis, which was meant to establish Renault as a force in the luxury market, has bombed. Thanks to a tax system that historically punished large-engined cars, France has had no success in the top class since the end of the Second World War. It has left Renault, Peugeot, and Citroen with no heritage to build upon and no worthwhile engines of over 3.0 liters capacity to compete. Hence Renault’s interest in buying luxury-car expertise and heritage. The company also lacks an SUV, but that is being addressed by taking one that will be built in Korea by Renault’s Samsung division, due to go on sale in 2007. —Ian Norris

FROM THE SOURCE headlines from the latest press releases


The striking evolution of Italian car design will be presented in "Five Decades of Lamborghini," a one-day-only exhibition of sports cars that bridged the gap between racers and station cars and defined luxury and performance for two generations of automotive aficionados. The exhibition is being presented by the non-profit Columbus Citizens Foundation of New York City in partnership with Fortunoff.  It coincides with Fortunoff's "The Secrets of Italy" pre-holiday VIP event, which celebrates the unsurpassed artistry of Italian designers, craftsmen, artisans and culinary masters. Starting with Lamborghini's first production model and ending with the latest 2005 Gallardo, which has a top speed of 192 miles per hour, "Five Decades of Lamborghini" presents cars that illustrate advances in materials, technology and design. The developments range from an elegant 1965 350 GT to the sensually curvilinear 1972 Miura SV and the aggressively geometric Countach, which has been likened to a speeding, slippery wedge.

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