Renault banks on new models, Megane price cut to fight off Tesla in France

PARIS, Jan 10 (Reuters) – Renault (RENA.PA) is banking on new models and a price cut for its Megane model to help in its battle against U.S. rival Tesla Inc (TSLA.O) on its home turf, a senior official for the French carmaker told Reuters on Wednesday.

“The Renault brand’s main focus in 2024 is to go back on the offensive in the electric segment, since we’re currently second,” said Ivan Segal, Renault brand’s sales director for France.

A pioneer in the electric vehicle (EV) market alongside alliance partner Nissan (7201.T) in the past, Renault has been overtaken by new rivals.

While the French automaker sold nearly 18,000 electric Megane last year in its domestic market, Tesla sold 25,000 Model 3s and more than 37,000 Model Ys, leading the French EV market, according to data firm AAA Data.

And China’s MG brand (600104.SS) sold 20,000 MG4 vehicles in its first full year on the French market.

Renault’s counterattack includes the launch of the new electric Scenic, and the arrival in the second half of the year of the R5, two models set to take over from the aging Zoe and Twingo.

Renault, which refrained last year from following Tesla’s price cuts policy, has also decided to reduce the starting price of its Megane by 10% in January, dropping from 38,000 euros ($41,600) to 34,000 euros.

Factoring in state bonuses that do not apply to buyers of the Model 3 and the MG4, the Megane is widening the gap with Tesla and is even slightly cheaper than its Chinese competitor.

“The competition in terms of pricing or leasing is stronger than a few months ago, and it will take a few more years for the electric vehicle market to stabilise,” Segal said.

($1 = 0.9138 euros)

Writing by Gilles Guillaume and Ingrid Melander Editing by Mark Potter