Reporting "Asre Khodro" ,A good opportunity for an interview with the Renault Trucks president of Greater Middle East operations came along as the Renault Trucks French delegates visited Iran. The following is the exclusive interview of Gregoire Blaise with AsreKhodro.
1_ Renault and Volvo have been sharing different markets between themselves (Like the North America market only for Volvo and some other markets for Renault). Is the same story going on for Iran market as well? Or there is some sort of plan to get Volvo brand to Iran along Renault?
Renault Trucks is part of Volvo Group, a group that is mainly into commercial vehicle business with different brands and Renault Trucks is one of them. The recently announced brand organization is very clear about the governance of each brand so the idea, the autonomy and the commercial strategy are on their own but they have to share synergy to deliver the result. This means that there is no market that Renault Trucks cannot be in. the question is where the good focus of Renault Trucks is and right now when it comes to international market the Middle East and Iran are part of the focus.
Volvo has a very long story in Iran and now it is looking for its own strategy with Iran market but we are independent. The only thing is that we need to share some components and we must keep this synergy but commercially we do what we think is best for the brand and the whole group at the end. Meaning that there is no conflict between the 2 brands.
2_ How well do you know Iran's Commercial Vehicle market? How do you describe it now and in the near future?
Personally I am still on discovery mode about this area of the world. I spent nearly 20 years within Renault Trucks one third of this was in Asia that means I am quite familiar with China market as it was my last assignment. But now my area of activity is the Greater Middle East from Pakistan and Iran to Ethiopia and Egypt. What I can mention about Iran is that it is a very specific market compared to others. Specific by size, by history, by demand and it is more sophisticated in terms of products because it is requesting high quality product and demanding on services.
3- Good quality European commercial vehicles like Renaults do not come cheap in comparison with the other Non-European products. Is there any type of plan to ease the problem?
I believe this very problem is not unique to Iran but all international markets face it. Everybody knows that quality does not come cheap. Since 2013 we have launched totally renewed range of Renault trucks products that combines the robustness and the design of Renault Trucks with the quality of Volvo Group Driveline which give us a very good range of products that I am so confident in. but when it comes to customer the best thing is to talk about what we call the Total Cost of Ownership (TCO). If you consider the price of the investment of purchasing a truck that is a source of income and also computing the total cost of the operation and value of the vehicle, then it is not too difficult to convince a customer to buy such truck. The tricky point is the financing where we must look for solutions with the partners. Fuel consumption and fuel cost is not an issue in Iran yet because of the fuel price but in the long term the fuel will not be this cheap. Our products are made so sensitive to the fuel consumption and therefore in the long run they will be a better deal in comparison to the other vehicles.
4_How do you describe the Renault place in Iran market? What percentage of market share does Renault look for in this market?
We are definitely a challenger in most of the markets. Iran market is specific for Renault Trucks maybe as much as Iraq and Egypt because it is a very well-known with a long standing background but now we have to restart. We want to be ambitious and humble at the same time. We are here not as a trader but a dealer. We are here to sell and to give services to make the customer happy but at the same time we cannot be a sustainable dealer if we aim for market share below 10% but after 20% we will feel secure and safe. Regarding Iran market in the short term our newly reappointed ambitious Arya Diesel partner aimed 15% of the market share for the Iran market which is less than 5 years.
5_ Other Commercial Vehicle makers like Daimler and MAN are entering Iran market quite strong. What are the Renault's short and long term plans exclusive for Iran market?
The first thing for us is a good partner. We have signed a contract regarding Renault heavy duty range that are C, T and K. They have to be ambitious, financially strong and determined. Because it is not about the business at the end it is about the willingness. We need to have good quality products, ambitious and eagerness to succeed in a market that everyone is approaching now. We are very happy to have Arya Diesel as our partner in Iran, we just need to support them.
6_ As appears Renault is so precise and sensitive in selecting business partners. As Iranian partner (Arya Diesel Motor) is one of the rare production sites of Renault products in the region, is there any special plan to set Iran as a domestic production site and export hub of Renault products in the future?
So far we have two partners in Iran producing two different ranges of Renault Trucks for Iran market, SAIPA Diesel for the D range and Arya Diesel for the C, T, and K ranges; both are very experienced and fully trusted partners. There are no plans yet but in the future any good business case out of this current setup will be carefully studied through political and customer reasons to use Arya Diesel facility to produce products with the same quality that we produce in Europe. This could be a good opportunity but it is not a short time plan. We are open to any good new business case with the neighboring countries. There are a lot to grasp and to do in Iran, we do not want to lose our focus over the market.
7_ Are there any exclusive plans to support Arya Diesel Motor as the only official Renault representative in Iran?
We have two long-standing partners in Iran, both are successful, they have different strengths but they are successful after we have investigated it was clear that as the first step it is the best to continue this long-standing successful relationship. We have to restart the Renault Trucks dedicated Team based in Iran. Our current closest team is now based in Dubai which is not that far but for a big market like Iran we need to have people that are fully dedicated to the market. We are now restarting this office in Teheran as a plan to support our partners closely. Also, we still have a training center in Teheran that we will reopen to be able to train the local sales force and technicians; which is a RT training center that is dedicated for the Iranian market. We hope that this will be operational by the end of the current year.
8_ Are there any chance that Renault would like to invest directly in Iran market? How about selling?
We are already investing in Iran but if you mean direct share investments more than what we are investing now, there is no plan as of today but of course in the future depending on political environment we will have more interest to invest. Iran is not only an important market but also a key market to us so we need to be successful in Iran. We have a long history with the automotive industry along with the Renault passenger cars and I think we have good partners to contribute to this transformation of the automotive transformation in Iran so more investments may happen but it is not a short time plan. The investments depend on the partners propositions as well but we will be very cautious regarding the opportunities that might come.
9_How the production line up of Renault would change in Iran in the near future? Is there any new product planned to be added to the current products line up?
The ranges are already quite extended now, so we don’t want to lose focus. The main target with Arya Diesel is now the C, T and K ranges and with SAIPA Diesel the D range where we need to be successful. So there is no plan on expanding range of products in the near future.
10_How much Arya Diesel background and infrastructures will help you to set up the fundamentals in Iran?
It helps us to be much quicker but as we were discussing we also realized that in some areas we still have quite significant gaps to fill between what we consider best in class competitors in Iran and what the minimum standards are. We are very confident about Arya Diesel industrial and financial capacity but their challenge will be to manage and train their dealers that is the challenging situation so far.
11_What is your idea about Iran’s capacity to produce Renault Trucks products and exporting them to other countries?
It is possible but we export products from plants that we fully own as we have in Brazil and North America. But when we have local partners that invests in plants, the products are usually for that very country and not for export. Building trucks is about the important scale effect. Building a plant is not a small thing. We prefer to have a huge plant with huge volume and can be efficient with a better price for the customer but time is needed to make those developments. Automotive industry in Iran is quite mature due to educated people and the car industry so we know that we will find good suppliers but it takes time.
12- Any last words or special message for Iranian customers?
Test our new range, you will love it!