Renault forecasts future local car market
By Timothy Sifert
Renault is gearing up its strategy to maintain its 10.7 percent market share in Poland, Europe's eighth-largest car market, as the country heads to the doorstep of the European Union and the car importer here faces a future of a potentially more volatile złoty and a slashing of EU-unfriendly import taxes.
On the whole the automobile company, much like its competitors, reckons EU membership will be a boon for new car sales in the country, and is banking that its plans to at least maintain market share will yield boosting revenues as the entire market grows.
But there's more to the story than just simple math.
According to market watchers, one of the most pressing issues for Renault, and indeed companies across multiple industries, is the volatile złoty versus the euro. And any more significant strengthening of the złoty should lead to an automotive game of "follow the leader" in which the market leader - Fiat, at present - raises prices and others follow.
Renault, the third largest car company in the country, is considering its options.
"Renault does not lose money ... in countries," says Patrick Blain, the senior vice president, market area Europe at Renault. Should there be a 20 percent change tomorrow, "then we'd have to raise prices 20 percent." He admits that such a move would hit customers' wallets hard, but that it would be necessary to keep pace with competitors on the global scale.
Other uncertainties Renault has factored into the future include expected changes to taxes on local commercial vehicles, such as rebates for value added tax rebates on automobiles, as well as an increase in second-hand car sales that could dent new car company sales projections.
Wojciech Drzewiecki, president of Samar, an auto analyst, says if there was one thing certain in Poland, it's the uncertainty, referring to automobile professionals' concerns over tax issues in particular.
As the number three player, Renault has increased its market share in August this year, compared to last year went it commanded 9.96 percent. At present, it leads Toyota by a thin margin, as the two had 10.7 percent and 10.54 percent in August of this year, according to Samar research. Fiat is the market leader with 17.07 percent of the market followed by Volkswagen-owned Skoda.
Renault's Blain says that other more organizational challenges for Poland, but also the rest of Central Europe, include the marketing of two brands. Besides touting the Renault brand, the company is also selling Dacia, from the Romanian car company it acquired in 1999.
