China: Renault to offer increased support to local dealers image

The French automaker has decided to increase dealer rebates offered to its Chinese sales network throughout the year, with deliveries expected to intensify their decline in the world’s largest auto market.

Renault will also cope with the preparations needed for the local joint-venture to open a new production factory in 2016, while the China Association of Automobile Manufacturers expects that sales of passenger cars in China will lower their growth from 10 percent last year to 8 % in 2015. After a dealer meeting held last week, Dongfeng Renault Automobile Co., the local joint venture, said it would move to “improve dealers’ profitability through additional and faster rebate,” while also providing acceptable sales targets for the year, to allow “the majority of dealers to keep up.” There were no additional details provided, but late last month the carmaker became the latest foreign “victim” of dealer disputes over who should bear the lower profits from the market slowdown.

Renault’s decision to award support to its dealers comes after similar agreements from Volkswagen Group and BMW Group – the sales networks of the foreign automakers have complained that financial support is needed, together with lower distribution goals. The sales networks have seen their profits faltering last year after their rapid expansion, combined with slower than expected sales and increased bans on ownership seen in several Chinese cities. Dongfeng Renault is also mulling the start of locally produced cars from 2016, with an investment worth 7.7 billion yuan ($1.2 billion) in a factory designed to produce 150,000 SUVs.

Via Automotive News Europe