Special Coverage

Frankfurt Auto Show

FRANKFURT – On the eve of the German auto industry’s semi-annual party here, Renault SA CEO Carlos Ghosn barges into the opening credits and introduces 10 new Renault vehicles.

Included in the barrage is a shapely Laguna coupe concept that undoubtedly will become one of the French auto maker’s new upscale models as it tries to boost sales to 3.3 million units in 2009 while hiking its profit margin to 6%.

Some of Ghosn’s 10 cars are old news: The Twingo has been on sale since June, the Laguna sedan will launch in October and the Laguna station wagon is to roll out early next year.

The Koleos cross/utility vehicle, which Renault Samsung Motors Inc. will sell in South Korea this fall, and the Clio Grand Tourer arriving early next year have been presented previously as concepts.

New introductions include the Kangoo utility vehicle and a compact concept version, which were driven across the stage before several hundred journalists invited to the event held in a hall outside Frankfurt.

Also unveiled is the Sandero, a small hatchback based on Logan underpinnings, which will be built in Brazil and sold as a Renault before year’s end. Later it will come to Europe as a Dacia. A Logan pickup was presented only as a sketch.

But the star of Ghosn’s show was the Laguna coupe, with a new 6-cyl. diesel developed with alliance partner Nissan Motor Co. Ltd. It propels the coupe 0-60 mph (100 km/h) in 7 seconds and is certain to be the main European powerplant for Nissan’s Infiniti brand as well as for upscale Renaults.

“There will be three Lagunas, and more high-end 4x4 crossover cars are coming,” Ghosn says.

He indicates Renault will concentrate on sales to fleets for its high-end cars, because the fleet market makes up 50% of industry volume in the sector.

Luxury cars are marked by quality, driving performance and cost of ownership, he says, and Renault expects the new Laguna will be well positioned on those traits. From the start of Renault’s Commitment 2009 business plan, a goal has been to place Laguna among the three best cars in its segment for quality.

Ghosn says he is proud of the car’s ride and handling, and a 3-year/99,000-mile (160,000-km) warranty and good fuel economy will make the car attractive to fleets.

“You will see more and more of this approach from Renault,” Ghosn says.

At the same time, Renault (with Nissan) has been investing in new plants in Morocco and India to get more capacity in low-cost countries.

Without naming the Detroit companies, Ghosn says history has shown auto makers that give up low-end segments to newcomers, as the Japanese and Koreans once were, eventually find themselves in big trouble.

“Every time you are not competitive in the low-cost segment, you lose your edge,” Ghosn says. “Now the Chinese and Indians are getting into low cost. If we are not in there, we lose some of our know-how and knowledge of how to compete. The challenge in low-cost is how you make money on it. The Indian manufacturers are very profitable.”

Renault is working with Nissan and India’s Mahindra & Mahindra Ltd. on a low-cost vehicle to compete with those in development by Toyota Motor Corp. and Tata Motors Ltd.

Ghosn repeats his assurance Renault is on the way to meeting the goals in Commitment 2009. Operating profit will be 3% this year, he says, with a target of 4.5% next year and 6% in 2009.

The new cars coming to market assure Renault’s sales and market share will climb, Ghosn says, but the proof of their success will be that operating profits increase as well.

Renault also has identified its brand character, the CEO says, summarizing it with three words: human, reliable and enthusiastic. Human signifies it is a popular brand, affordable and respectful of the environment, he says, while reliable means Renault also is a strong brand. Enthusiastic represents the employees’ willingness to take on risks and work hard.

Ghosn thanks Renault workers for the way the “entire company rallied around me” despite the difficulties of the task of doubling the number of product launches.

One risk Renault is not ready to take on now is the fulfillment of Ghosn’s dream to have a third leg of the Renault-Nissan Alliance with a North American auto maker. That fell apart last year when a proposed tie-up with General Motors Corp. failed to materialize.

“If you don’t have the position for successful execution of your strategy, you have to postpone it,” he says. “That doesn’t mean the strategy is wrong.”

Commenting on Chrysler LLC’s recent hiring spree, he says the auto maker’s new owners “are very serious about reviving the company and reviving the brand. A collection of talent is being drawn to the company.”