Flop. Renault Alliance: The French manufacturer’s American dream
For Renault, selling cars in the US is an old dream. A dream since 1906, when the Renault panel was first installed in American showrooms, in the cities of New York and Chicago. We are talking about modest offices here, but already the ambition is big.
These advanced bases should be used to open outlets in the United States. At that time, the image of France in the United States inspired high class and luxury. But competition is fierce: many local builders are entering this new market.
In 1910, there were dozens of hand-made automobile brands in Manhattan alone. Only 75 cars will be sold in the first year, which makes it impossible for the invested sums to be profitable.
The second attempt will take place in the 1950s. France is barely recovering from the war and exports are encouraged more by the government authorities. At the same time, several 4CVs were already sold across the Atlantic by independent importers.
Renault will officially return by creating a new company, Renault of France. The diamond brand wants to take a hit from Volkswagen, which has achieved great success with the Beetle.
Pierre Dreyfus, CEO of Renault at the time, is convinced: if the Germans can sell cars to the Americans, Renault can win. And the beginnings will prove him right.
Americans are crazy about Dauphine
In 1959, the car was launched and over 102,000 Dauphins were sold! Orders come in from all over America. The Renault plant in Flints is struggling to even keep up with these ‘export’ versions.
But the small Renault is hardly adapted to the American road network. Insufficient power, questionable reliability… Dauphine rusts in humid regions, fails to start in cold regions and suffers from dust in hot regions. At Renault, we do not react immediately.
Problem: The American Renault network is very different and the logistics are complicated. Spare parts are scarce, repair times are extended. Customers and dealers are impatient. But the worst is yet to come.
The optimistic manufacturer planned to sell at least 100,000 Dauphins on American soil in 1960. At least 50,000 of them are rusting in the parking lots of US dealers. Renault sells them and even returns them to France.
The car parks in Le Havre are already full of these Dauphins waiting for customers. The launch of the Caravelle, R8, R10 and even the Estafette won’t change anything. Americans don’t want Renault anymore.
The end of the story? No, because the fate of Renault will pass that of the American manufacturer AMC.
Renault will strike
Renault wants to up the ante and fund its American ambitions. The US subsidiary becomes Renault USA, and the manufacturer finds a solution to its biggest problem: a weak distribution network.
Renault signs an agreement with the American manufacturer American Motors. AMC will distribute Le Car, a local version of the Renault 5, and sell Jeeps in its European network in return for Renault.
In 1983, Renault became the main shareholder of the struggling AMC. This time, we are sure that the doors of the American market will be opened wide for these Renaults, which will now be manufactured locally.
Renault 9 as a spearhead
Renault’s strategy mainly involves the Renault Alliance. The car is none other than the Renault 9 with air conditioning, chrome and revised equipment. The car will be manufactured at the Kenosha, Wisconsin plant. Starting with engines, we work on 600 cars assembled per day with half of the components imported from France.
Renault is investing 2.5 billion francs in the modernization of the plant. The press is enthusiastic and the car is named “Car of 1983”. All lights are green.
Short term success
Priced at $5,600, the Renault Alliance went on sale on September 1, 1982. By the end of December, 30,000 had already been sold. Within two months, the Alliance outsold the R5 Le Car in 1982.
Of course, the car collides with the Japanese and the Ford Escort, but Renault manages to interest young customers, for whom this Renault is often the first new car. To convince them, he does not hesitate to add to the brochure, talking about a real “computer on wheels” to wake up the injection engine.
A year later, Alliance sold 156,000 copies: a real success.
Despite an advertising campaign on all American screens, the Alliance will quickly sell out. The competition was not idle, and Renault was quickly criticized for its modest 1.4 engine with about sixty horsepower.
To liven up the car, we reject the Alliance in a beautiful convertible version. Unlike many transformations of the era, this is done directly at the factory. Before adding the various fittings, we cut the roof of the R9.
The ad promises “a ride with the wind in your hair to experience the thrill of freedom.” But the crisis is moving away, and with it the fashion for small cars.
Still, Renault doesn’t feel the wind is turning. America’s growth is accelerating, and Americans are ditching compact cars for Detroit-built gourmet sedans. The oil shock is over, gasoline flows freely: economy cars are out of fashion.
Another big problem is that Renault buyers face chronic reliability problems. Engines, catalytic converters, accessories… everything was ruined, and the cars, poorly protected against corrosion, stood up very poorly to local weather conditions.
In 1986, the subsidiary lost $91 million, and in the last two years, $200 million has gone up in smoke. Since 1980, Renault has lost a total of 800 million dollars in the American market.
In France, Renault’s fortunes were no better, and the assassination of Renault boss Georges Besse by members of the Direct Action group dealt a blow to the group’s American ambitions.
New boss Raymond Levy starts an American tour. He visits the factories of the group, calms down the workers, but he has to make a decision. Renault sells its 46% stake in AMC to Chrysler. There will be no more Renault in the US.
A new plant set up in Canada to produce the local version of the Renault 25 will eventually produce it under the Eagle brand. A short and modest career will not allow Renault to recoup its investments.
Renault will never again try to conquer the American market.