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Renault and GM Target the Light Truck Market

Renault is developing a platform with Nissan designed to renew the LCV range that will contain Japanese powertrain components.

Europe is a real battleground when it comes to light commercial vehicles (LCVs). Last year, Renault was the market leader with a 14.1%, followed by Citroën (10.2%), Fiat (9.8%), Ford (9.3%), Mercedes-Benz (8.4%) and Volkswagen (8.2%). Opel, GM’s European brand, has seen its market share slump to just over 4%, a situation it expects to quickly change based on a cooperative agreement with Renault. Under the terms of the December 1996 pact, the French automaker was to supply its existing Master (2.8 to 3.5 ton) and Trafic series (2 to 2.8 ton) to GM Europe for its Opel and Vauxhall brands. Together, GM and Renault would create the replacement for the Trafic.

The first real fruits of that collaboration are now in dealers’ showrooms throughout Western Europe. While Opel (and its UK sister Vauxhall) have had some success in selling the Movano and Arena–Renault’s re-badged Master and the previous Trafic respectively–it is with the new Vivaro, the new Renault Trafic, where the real hopes lie.

Work began on the new Trafic/Vivaro project, codenamed X83, in early 1997. Renault was responsible for the design and engineering, and GM for the manufacturing. Within Renault, X83 became the responsibility of the DVU, the Direction Vehicules Utilitaires, a specialized business unit created to improve the French automaker’s position within the commercial vehicle market. An integral part of this unit is i-DVU, a department of more than 830 engineers in charge of studying, developing, and perfecting new models while also devising the manufacturing processes.

One of the first problems for the Renault/GM combine was the supply chain. It was not just a question of supplying parts at the cheapest possible price, but which company’s working practices would be followed. Renault has long looked for the active participation of its suppliers in the design process. Opel has tended to look for solutions in-house. Also, Renault asks that its suppliers validate the parts they supply and certify their facilities. Opel does not. The French company took the lead.

The companies agreed that many of the vehicle’s systems and modules, including the seats and trim, instrument panels, HVAC unit, engine cooling and exhaust systems, and the front and rear axles would be outsourced. To this were added stamped parts and subassemblies like the rear side members and the body side, although this was partly the result of a lack of space in the plants. Engines and gearboxes for the Trafic/Vivaro are sourced from Renault and include a pair of 1.0-liter common-rail diesels (82 or 100 hp) and a 2.0-liter gasoline engine producing 120 hp. The six-speed gearbox used on all but the 82 hp engine is derived from the Renault Laguna.

The Trafic/Vivavro will be built at two plants in Europe and it may even be assembled in Brazil at a later date. GM, which is responsible for manufacturing the vehicles, opted for its IBC Vehicles plant at Luton, UK, and Nissan’s plant in Barcelona, Spain. Once fully ramped up, total annual capacity should be around 150,000 units, with 86,000 coming out of Luton and 64,000 out of Barcelona. It’s possible that Renault’s plant in Curitiba, Brazil also will produce the new model alongside Renault’s Master.

Producing the vehicle at Luton means dealing with the strength of the British pound versus the euro. Since the suppliers contracts were written in 1999, the pound has appreciated by around a fifth, leading to some serious financial implications. GM in particular has made light of it, saying decisions can’t be made on the daily currency rate and that a van’s lifecycle is far longer than a passenger car’s.

Nevertheless, the importance to both Renault and GM of the new Trafic can’t be overstated. Nissan and Renault together rank fifth in the international LCV market with 750,000 vehicles sold worldwide, and have a 7% market share. Nissan’s LCV production accounts for 230,000 units sold worldwide (mainly pick-ups), including 150,000 units in North America and 25,000 in Western Europe.

Renault has identified the LCV market, as defined by European standards, as an important area for growth. Between 1995 and 2000, it grew by 10% to nearly 10 million units worldwide. In developed countries, LCVs are a way of penetrating the company fleet market, which in Western Europe accounts for 25% of all passenger and car sales. Meanwhile, LCVs enable automakers to penetrate the automobile market in emerging countries. For example, in countries such as Thailand (68%), China (63%), and Korea (51%), the LCV share is the greater of the two.

This is why both Renault and GM are keen to exploit their five-year old partnership. Renault says that excluding sales of Nissan vehicles, it has targeted 2004 worldwide sales of around 400,000 units in 2004 and 700,000 in 2010. Of these, less than half will be in Europe.

Renault, however, is not stopping there. It is developing a platform with Nissan designed to renew the LCV range that will contain Japanese powertrain components. These include placing Nissan’s 3.0-liter common-rail diesel engine in the Master and a Nissan rear axle in the Kangoo 4x4. Though the spearhead for its move into the Asia-Pacific region, Nissan also will sell re-badged versions of Renault’s Master, Trafic, and Kangoo in Europe, as well as a Brazilian-built version of its own Frontier pick-up in Mercosur.

With a “Top Van” award already under its belt, Renault’s global ambitions, along with GM’s more modest European aims, look as though they soon might be realized.

 

Trafic

Renault calls it the Trafic, GM the Vivaro, both look at this light commercial vehicle as an entry into fleet sales and developing markets.