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The Spaminator
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June 19, 2012
Automotive News

PARIS -- Renault is considering adding two upscale brands and further expanding in emerging markets to decrease the automaker's reliance on Europe's shrinking volume car market, Chief Operating Officer Carlos Tavares said.

The automaker may revive the Alpine marque to offer sports cars and create another high-end brand to sell luxury models, Tavares said in an interview with Bloomberg.

"You need to be competitive across the world," Tavares said. "That's why we have been managing the change from a European-focused company toward a global carmaker," he said.

Under the plan, Renault would have four brands in total, with the Romania-based Dacia selling no-frills autos, Renault offering volume cars with more options, Alpine serving as the sports-car make and the Initiale Paris insignia becoming the luxury brand.

With no high-end marques currently, Renault's most expensive car is the large minivan Espace, which has a base price of 35,100 euros ($44,340). As a comparison, the flagship A8 sedan from Volkswagen luxury unit Audi starts at 78,780 euros.

In February, Tavares said Renault is in the early stages of developing an upscale car based on a Mercedes E class platform, which would extend a partnership formed by the French carmaker and Mercedes parent Daimler in 2010 to pool development and production of small cars and engines.

Last month, French newspaper Les Echos said Renault will make a decision on the Initial Paris and Alpine sub brands by the end of the year.

Deliveries drop

Tavares' ambition to create two new units comes as Renault faces slumping sales in western Europe, where the automaker earned about 65 percent of 2011 revenue.

The region's car deliveries will shrink 7 percent in 2012, the fifth straight annual decline, as consumers hold back spending over concerns the sovereign debt crisis will spread, industry association ACEA said this month.

Deliveries of Volkswagen Group vehicles in the region fell just 1.9 percent through May, buoyed by sales of Audi, which gained 4.2 percent.

VW Group's European market share climbed to 24.1 percent from 22.8 percent. Audi accounted for 44 percent of the Germany-based carmaker's first-quarter operating profit even though it delivered just 15 percent of the group's vehicles.

A similar brand could be central to Renault's plans to expand outside Europe, particularly in vital markets such as China.

"We may have one day a luxury brand," Tavares said. "That would help from a profitability standpoint because everybody's always looking at VW and what Audi represents for the VW group."

Mike Tyndall, a Barclays analyst in London, said: "All eyes in Europe are on VW, wondering how to compete against the number one player. So the question for Renault would be: can an upscale offering be credible?"

Reviving Alpine

Renault is talking to potential partners to help revive the Alpine brand and share in the development costs, Tavares said, without providing additional details. Renault currently has two main alliances with Nissan and Daimler.

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