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Renault Trucks is putting China at the top of its development strategy and pumping investment into the country.
The company aims to sell 50,000 trucks in China by the year 2010, according to a senior executive.
Last year annual sales in China notched up a meagre 250 trucks.
"To achieve our target, we must localize production," said Huang Yuan, Renault Truck's chief marketing officer in China.
"We hope to do that by 2007."
Despite entering China as long ago as the 1960s, Renault has lagged behind other manufacturers in the quickly expanding market.
The company took a major step forward in January last year when it signed a framework agreement with Dongfeng, one of China's top automobile manufacturers, to launch a joint venture to produce both Dongfeng and Renault brands.
"We are at the final stage of negotiation," Huang said, but declined to say when the deal would be completed.
At the same time, Renault Trucks is also expanding its own sales network in China.
In 2004 Renault Trucks (Shanghai) Co Ltd was established to get first-hand knowledge of the market and potential local customers.
The company is aiming for a minimum 10 per cent market share within the next three years.
In order to increase sales rapidly, Renault is looking for local truck dealers that have a strong financial background and good knowledge of China's truck industry, said Huang.
Currently, with only 12 dealers in China, Renault Trucks has to fly its engineers out to fix vehicles.
"That is expensive," Huang said.
To remedy this problem Renault Trucks will team up with eight local dealers in the Inner Mongolia Autonomous Region, Hebei, Shanxi and other provinces by the end of this year.
Another 10 dealers are expected to join Renault Trucks by the end of next year.
However, even once Renault Trucks has improved its service, it will still have a battle to stand out in the Chinese market.
For price-sensitive Chinese customers, "good service should also include competitive prices," said the manager of a Chengdu-based logistics company, who declined to be identified.
"Both Volvo and Ford have good brand names and services, so why should I use Renault if its price is the same?" he asked.
(China Daily June 2, 2005)
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