With the misfortunes of America’s two largest automakers being trumpeted frequently on the news, it seems as if little attention is being paid to some of the other automakers out there. France’s Renault, once in poor shape itself, has rebounded nicely and is prospering with its relationship with Nissan, a company it has controlling interest in. Speculation is that Renault wants a greater piece of the luxury car market, even beyond Nissan’s luxury division, Infiniti. Would General Motors consider selling Saab to Renault or would the French automaker be better off looking elsewhere? Let’s take a look at some options for Renault.
Make a bid for Saab. It is no secret that the Swedish automaker hasn’t been much of a hit for General Motors. Unlike the other Swedish automaker Volvo, itself owned by Ford, Saab has produced little benefit for GM since being brought into the fold in 1990. A clash in management styles hasn’t helped with GM’s line management style going up against Saab’s egalitarian style. Although not exactly a luxury line, Saab could be upgraded and give Renault renewed access to the American market and much needed cash for GM.
Go after Jaguar. Much like Saab’s relationship with GM, Jaguar hasn’t done a lot for Ford. Unlike GM, however, Ford has handled its international acquisitions much better and has allowed its new holdings to continue to plan and expand their product lines without excessive dictation from Detroit. Still, the value of Jaguar remains strong and the time for Ford to sell this British automaker off would be now. Let’s just see how well the French and British work things out too!
Ramp up Infiniti. Even in expressing interest in acquiring another automaker, Renault does have its own “in house” luxury line in Infiniti. After a poor start, Infiniti has strengthened its product line and is better poised to compete against Lexus and Acura. A careful “retuning” of Infiniti could also yield a line of cars better suited to compete against BMW and Mercedes who essentially lead the luxury car market in the Europe. Working with the existing lnfiniti brand would be cost effective too.
Introduce a new luxury line. Much as Toyota, Honda, and Nissan have introduced luxury lines of their own vehicles, Renault could do the same and profit immensely. With Hyundai expected to do the same, Renault’s new luxury division could give the automaker instant access to the luxury market and prepare the company for reentry into the U.S.
As much as General Motors and Ford are reeling right now, neither Saab nor Jaguar may be auctioned off. At present, both Swedish automakers have a significant cross division investment that cannot be easily disconnected. Planned vehicles in the Saab pipeline would have to be scuttled, which would effectively reduce the automaker’s value overnight.
Renault may still be eyeing Saab, but the logistics aren’t that easily worked out.