France's Future-Leading Automobile Companies: Renault Vs Peugeot

 

Clash of the Leading Automobile Companies? What's the future ahead of Renault and Peugeot?

A competitive battle between France's leading automobile companies? Let's take a closer look!

Today, we will take a look at where Renault's and PSA's (Peugeot/Citroen)'s future strategies are heading.

Renault's 'eWay' and Peugeot's 'Power of Choice'

Let's start with Renault. A very important player in Renault's growth strategy is 'Nissan'.

The Renault-Nissan-Mitsubishi Alliance, an alliance between Renault, Nissan, and Mitsubishi, was established in 1999.

Renault and Nissan each own a 40% stake in the joint operation.

But in hindsight, Nissan is under the strong influence of Renault.

Renault owns about 40% of Nissan's stake, while Nissan's stake in Renault is around 15%.

Moreover, French domestic law makes it very difficult to exercise influence as a shareholder.

On the surface, it appears to be in an equal position and Nissan's own brand is still maintained, but it is safe to say that Renault's breath is behind it.

Nissan plays a big role in Renault's strategy of growth and in its automobile companies.

What makes Nissan so important to Renault's strategy is its electric and hybrid vehicle technology.

In 2016, Nissan sold 31,909 electric and hybrid vehicles, ranking fifth in the global market.

Renault had only 22,771 units.

Recently, Renault and Nissan's electric vehicle sales have been reversed.

From January to July 2020, Renault ranked second in the world with sales of approximately 51,000 units.

On the other hand, Nissan plunged from 47,000 to 33,000.

In this way, Renault has now become a major player and leading automobile company in the electric vehicle market, but Nissan's market advantage was required to reach this position, since many other companies won't let them simply pass through.

Renault's Strategy for its future; The 'EWAYS' and Peugeot's opposing one, The 'Power Of Choice' the leading future strategies of these automobile companies.

Renault's electric/hydride vehicle strategy is well illustrated in 'Renault eWays' announced in 2020.

Renault introduced a more detailed strategy this year. It has announced that it will increase the proportion of electric vehicle sales to 90% by 2030.

It plans to introduce 10 electric vehicle models by 2025 and provide cheaper batteries.

By bringing the cost of 1 kilowatt-hour (kWh) below $80 by 2030, the battery cost is reduced by 60% every 10 years.

Peugeot's slogan against this is 'Power of Choice'.

Peugeot has set a policy to complete electrification of all models by 2023.

Technological improvements were also made. Although it is an electric vehicle, in terms of design and performance,

It has announced that it will launch a model that rivals existing internal combustion vehicles.

The representative models are 'Peugeot e-208', 'Peugeot e-2008', 'Peugeot 3008', etc.

In fact, if you want to know Peugeot's macroscopic future strategy, you have to start with 'Stellantis'.

Stellantis is a car giant formed by the merger of Peugeot-Citroen's PSA and Fiat-Chrysler (FCA) in January this year.

You can learn more about the electric vehicle strategy through Stellantis.

First, it announced that it would invest 30 billion euros in electrification and software alone by 2025.

Securing high-density energy technology aimed at 2024 and battery production technology that does not use nickel and cobalt were also presented as important milestones.

14 brands under Stellantis, including Peugeot, Chrysler, and Maserati, are joining the initiative.

Looking at the future strategy alone, Peugeot and Renault are not very different. Ultimately, the ultimate goal of increasing the proportion of electric vehicles and securing technology is the same.

However, one difference stands out. Stellantis, to which Peugeot belongs, clearly stated "Securing influence in the European and American markets", and

He revealed that he was going to focus. On the other hand, the most important markets for Renault are so-called emerging markets such as Russia, India, and Eastern Europe.

Peugeot focusing on China VS Renault targeting emerging markets

The PSA group of Peugeot and Citroën divided the global market into six regions and introduced business strategies for each region.

One line of explanation for China is as follows:

"Strategic market for the group and the largest automotive market in the world"

Renault is taking the initiative of their reputation.

Unlike other regions that are rather abstract and simple, such as "dynamic markets" or "preparing to take off", their attitude toward China is quite serious.

Renault has focused on emerging markets that are leading the growth of the automobile market by making full use of its strengths.

Renault (Nissan to be exact) also partnered with Dongfeng Motors to launch a model called 'Venusia'.

In August, they signed an eco-friendly car partnership with a Chinese automobile manufacturer 'Geely' to produce models that will target the Chinese and Korean markets.

However, the fact that Renault is focusing more on emerging markets is evident in several ways.

In 2017, Renault announced a growth strategy to sell 5 million units in emerging markets over the next six years.

To this end, they even changed the slogan from "Drive the change" to "Drive the future".

There are huge advantages to strategy for entering emerging markets.

We have a number of brands that are already established in emerging markets.

For example, Romanian 'Dacia' was incorporated into Renault in 1999, and Russian brand 'Rada' came under Renault in 2017.

Both brands allow you to enter the Eastern European and Russian markets without much difficulty.

The emerging markets Renault is working on the most are Russia and India.

According to the announcement in April 2020, the direct and indirect Russian automobile market share of the Renault-Nissan-Mitsubishi Alliance, headed by Renault, is 37.3%.

Hyundai-Kia Motors, which is in second place, has a market share of 23.5%, a difference of 14%.

Radha's credit is great here. Radha's market share in Russia alone reached 20.6%.

They even have developed a tailored strategy for the Indian market.

In fact, Renault entered into a cooperation contract with Indian automobile manufacturer Mahindra in 2007.

But later failed in reality and ended the contract three years later.

However, he did not give in and entered India independently.

They also focused on developing car models that take into account regional characteristics.

The emphasis here by Automobile companies is on 'price competitiveness'.

Indians increasingly want to own a car, but their purchasing power is still limited.

In 2015, Renault launched the small SUV 'Kweed', priced at 5,000 euros, to satisfy market needs.

In fact, Renault has no choice but to focus on 'new market development'.

Growth has been stagnant in Europe, which has been a key market so far.

Renault is targeting emerging markets by actively utilizing its strengths, namely, the fact that it has a brand that has a firm hold on a specific market under its umbrella.

The French car brand outlook will give you another perspective on understanding the automotive market today and tomorrow.

This kind of reminds me of how Andre Citogen shook the automobile industry.