Renault accused by China dealer of setting unrealistic targets

Article by Christian A., on January 22, 2015

A dealer in China has accused Dongfeng Renault Automotive Co. – a joint venture between Renault and Dongfeng Motors – of setting very high sales and forcing local retailers to acquire more vehicles than they could dispose. The accusations were made in a letter posted in the Web site of official newspaper People's Daily.

According to the dealers, Renault’s moves led to price cuts and heavy losses among dealers. It said that around 90 percent of the Renault local dealer network suffered financial losses in 2014 and called for a united front against the brand to force it to set realistic sales targets.

The letter came ahead of a dealers' conference set later this month, during which Renault is expected to set 2015 sales targets for its Chinese retailers. In an e-mailed statement to Reuters, Renault said that sales at it’s the joint venture surged 26 percent in 2014, noting that its dealers were at "the front line in the battle for China market share."

The company, however, said that its dealers are independent business organizations vulnerable to market forces, adding that it would offer support to retailers experiencing "mismanagement and poor performance."

The brand has plans to increase the number of its dealers in China 50 percent this year to 150 retailers as it bids to command a larger market share.

Earlier this month, BMW agreed to provide CHY5.1 billion ($824 million) in subsidies to its local dealers, according to China's dealers' association. The association said that Porsche and Toyota Motor Corp. are also holding talks with their Chinese dealers over subsidies and sales targets. Vehicle sales in China only grew 7 percent in 2014.

If you liked the article, share on:

Topics: renault, china, dealer, sales



Mercedes-Benz’ mother company, Daimler, is very optimistic about the company’s performance. And it is pretty obvious because the company plans to increase production this year, assuming to boost their sales...
by - March 23, 2018
After Opel’s launch of the Insignia GSi last year in a liftback and a wagon body styles, Opel is ready to add the “GSi” badge on the Corsa. This will...
by - March 23, 2018
Cadillac CT6 will apparently be getting a major power upgrade since the new V Sport model will be the first model to get a direct injected 4.2 liter biturbo V8...
by - March 22, 2018
With all the issues going around the automotive industry, car makers have to be more mindful of their moves, especially when it comes to the development and production of cars. ...
by - March 21, 2018
Earlier this week, on exactly Monday morning, was a devastating incident that involved Uber, an autonomous vehicle, and a pedestrian. Long story short, there was a pedestrian that was hit...
by - March 21, 2018