Renault is experiencing an identity crisis.
The company is trying to find its position in the changing global automotive industry, which is being reshaped by electrification and the significant growth of Chinese automakers. It aims to reconfigure its alliance network and update its product lineup.
In Brazil, the French successfully transformed their image from producing delicate and costly cars to becoming known for selling affordable and dependable vehicles. However, those prosperous times are now in the past.
Renault focuses on selling to governments and rental companies, aiming for high sales volume and reduced margins while targeting a niche market and creating demand for their limited car models.
Executives, engineers, and dealership networks are working to end years of stagnation by forming an alliance with Chinese Geely, investing in hybrid-flex motorization, and repositioning the brand.
A challenge awaits Ariel Montenegro, the new CEO of the Brazilian subsidiary, who is from Argentina.
François Provost will be responsible for implementing the Renault transformation plan on a global scale. He took over as CEO in July following Renault’s announcement of a net loss of EUR 11.2 billion in the first half of the year, pledging strict financial discipline.
InvestNews attempted to contact Renault Brazil, but the car manufacturer did not participate in the interview.
Crash loss
Renault, previously ranked fourth in the national market in the 2010s, has now dropped to sixth place in the 2025 sales ranking, trailing Fiat, Volkswagen, GM, Toyota, and Hyundai. Toyota and Hyundai have taken over a portion of Renault’s market share, particularly in the compact segment and SUVs.
Renault is behind Jeep, Honda, and BYD in the rankings for ride cars.
Part of the decrease is associated with the sales pattern. As per a study conducted by Bright Consulting, 71% of Renault cars sold in Brazil from January to July this year were transacted through direct sales, which specifically refers to sales made directly with businesses, rental agencies, or government entities, bypassing the conventional dealer network.
Half of these direct sales ultimately go to renters, who have lower margins and a significant effect on the vehicles’ resale value. These cars quickly re-enter the market as nearly-new, decreasing prices and negatively impacting the brand’s value perception among regular customers.
Renault’s decision to abandon retail image building limited its competitiveness to a price-oriented approach, which is becoming more uncertain due to rising Asian competition and the Brazilian market’s fragmentation.
The brand has lost prestige if stated otherwise.
Renault, once known for its durable and budget-friendly vehicles, lost its appeal to consumers. According to Cassio Pagliarini, former marketing director of Renault, the lack of brand allure is failing to engage retail customers, which is essential for brand development and profit margins.
The effort to start a new chapter started with the introduction of the SUV Kardian, a Brazilian-designed car that was launched in March 2024. Despite being promoted with the slogan “the change that changes everything,” there has been no significant shift in Renault’s image or perceived quality as anticipated.
Kardian ranks 24th in retail car sales this year, making it the top-selling Renault model but lagging behind competitors like Tracker, Nivus, Pulse, and Kicks. Additionally, it sells fewer units than Chinese models like Tiggo 7, Tiggo 8, Haval H6, and Dolphin Mini.
Cassio Pagliarini believes that for Kardian to improve, it requires support for its dealership network, effective communication, and a unique value proposition.
Renault is now focusing on the Boreal SUV, a model produced at the São José dos Pinhais factory and positioned higher than the Kardian. Its aim is to compete directly with the Jeep Compass and Toyota Corolla Cross.
Kardian and Boreal were constructed using the CMF-B platform, a versatile base created by the Renault-Nissan alliance for various motor options, such as hybrids. The aim is to enhance efficiency and lower expenses by utilizing shared components and processes across different models worldwide.
The Renault factory in Paraná will produce vehicles created in collaboration with Chinese company Geely, which owns Volvo. The partnership will utilize the SEA platform to develop electric SUVs and plug-in hybrids, with Renault focusing on the body and Geely handling the electronic and mechanical aspects.
The Renault dealership network will be utilized for Geely’s expansion in the country, with 23 stores in 19 cities, some operated by groups representing Renault. Geely offers premium models like the 100% electric EX5, contrasting Renault’s focus on entry-level models like Kwid and Kardian.
Creating a sense of self
Renault faced a positioning dilemma upon entering the Brazilian market in the 1990s. Despite establishing its own subsidiary and taking over the commercial strategy, the company struggled to compete with local competitors due to issues such as higher prices, poor reputation for durability, costly maintenance, and low resale value.
The company entered the Brazilian market by introducing the Dacia line, which included models like Logan, Sandero, and Duster. This move helped establish the brand as a provider of affordable, durable, and spacious cars suitable for middle-class families in the country.
Renault’s success in Brazil peaked in 2019 when it ranked fourth nationally with a 9% market share and over 240,000 units sold annually. However, the brand’s popularity declined as its vehicles quickly aged compared to competitors’ updated offerings.
Sandero, Logan, and Duster were designed with long-term plans that included incremental updates every three years and a platform exchange every 12 years, according to Cassio, a former executive of the company. He considers this timeframe too lengthy given the rapidly evolving market conditions.
The bond with the end consumer weakened due to the aging of the product portfolio, declining perceived value, and reliance on direct sales.
Renault is attempting to reposition itself through a new product cycle, strategic partnerships, and a well-defined energy transition strategy. Consistency in communication, distribution network, after-sales service, and attractive products is crucial for this endeavor, as highlighted by Pagliarini’s emphasis on the importance of marketing and consumer engagement in addition to product quality.
During breaks
The Renault crisis did not start in Brazil, but was accelerated by a Brazilian individual. Carlos Ghosn, who fell from grace in 2018, was a key figure in the Renault-Nissan-Mitsubishi alliance and the acquisition of Dacia. Ghosn also pioneered electrification by introducing the Zoe in 2012.
Renault stopped being a state-owned company in 1996, with Carlos Ghosn being instrumental in the company’s transition after privatization. Presently, the French government still holds a 15% stake in the company.
The arrest of Ghosn in Japan for allegedly not reporting income and misusing company assets caused upheaval in governance and led to internal unrest. His later escape to Lebanon was widely publicized and turned into a Netflix movie.
Renault had to reorganize its strategy following the pandemic and substantial financial losses experienced by several billionaires. Luca de Meo assumed leadership of the company on a global scale in 2020. He introduced the “Renaulution” plan, inspired by strategies from Fiat and Volkswagen, which focuses on cutting costs, enhancing profitability, and revitalizing the brand image.
Renault stopped pursuing projects with low returns and emphasized profitability through higher sales. The partnership with Nissan was reorganized, with both companies having equal ownership stakes of 15%. New investments were planned for the electric vehicle division named Ampere, which will focus on projects involving electric vehicles and software, such as the Mégane E-Tech, the new Renault 5, and the Twingo electric, designed in collaboration with Nissan.
Ampere is also in charge of battery initiatives with LG Energy Solution from Korea and CATL from China, and has a key role in supplying technology for the group’s various brands.
Another sector is the Horse division, established with Geely and supported by the oil company Saudi Aramco. It spearheaded the advancement of hybrid engines and high-performance combustion. The collaboration also involves Mercedes-Benz, which may adopt the Horse architecture for upcoming vehicle designs.
Renault aims to be innovative and cost-effective in Latin America, aligning with the new global structure. The company is striving to enhance sales margins in the region, which has gained significance since 2022 following Renault’s sale of its majority stake in AvtoVAZ, the Lada owner, to the Russian government.
The agreement occurred as a result of Western sanctions on Russia following the Ukraine invasion, leading to Renault losing a significant market. AvtoVAZ’s production increase also heightened reliance on the European market, which accounts for 70% of Renault’s income. Hence, the automaker has strong motives to re-enter the Latin American market, particularly in the region’s biggest economy.
Renault’s history in Brazil demonstrates that gaining importance requires time, while losing it can happen quickly. Through portfolio adjustments, partnering with Geely, and frequent executive changes, Renault has acknowledged the importance of adapting and reshaping its identity both domestically and internationally.
The future will determine whether this rebuilding will result in cars that consumers truly desire to purchase.
