Interview Ukrainian macroeconomics

Ukraine has enormous potential and the possibility to develop it in the coming years

François Marriott, General Director of Renault in Ukraine, told  about the experience of being the world’s leading automobile corporation, Ukraine’s place in the Renault global system, as well as about trust as the key link to investment and relationships between producer and consumer.

: When was the presentative office of Renault started up in Ukraine?

F. Mariotte: Renault started its operations in the 2000 year, so it was 18 years ago. That was an early start for the company inside the country. We have created a subsidiary. Renault Ukraine is a subsidiary of the company in France. We are not acting as a private importer; we are acting as the official representation in the country. The subsidiary in Ukraine is part of the main company in France.

: What criteria were considered while entering the Ukrainian market?

F. Mariotte: We decided that Ukraine is an important European country. It is a big country by the size. When you look at the level of the car market in the year 2008 with almost 700 000 cars per year, today it is much smaller–around 90 000 cars per year. However, when you see the ratio between the size of a new car market and the size of the country, there is a huge discrepancy and it is about the potential of the country. Therefore, Ukraine is a country with a great potential for the next years. This is why we are acting as a subsidiary of the main company in France because it is the country, which we consider a European country with potential.

: What other brands are the parts of the Renault Group?

F. Mariotte: Renault Group is part of the Alliance Renault Nissan-Mitsubishi. It is the first automotive group maker in the world. We have sold more than 10 million cars the last year. The Renault Group is one part of this Alliance Renault Nissan-Mitsubishi. The Renault Group is Renault, Dacia, Samsung, which is a Korean brand, Lada, and Alpine which deals with sports cars. There are 5 brands. The Renault Group is operating in Ukraine and Renault is leading the market in Ukraine. From 2015, we are the leader in the Ukrainian car market and I guess that this year we will still remain the first brand in Ukraine on PC and LCV market: private passenger cars and light commercial vehicles. When I say that a new car market in Ukraine – 90 thousand cars Renault PC and LCV – will rich around or above 20% of the market share, which means 11 000 cars have been sold this year.

: What electromobile cars are there in the Renault Group?

F. Mariotte: Renault is heavily acting on zero-emission mobility. Zoe is one of our most popular models. We started in 2010, so we are the first. We are leading the European market of electric cars with Zoe. We are selling two cars in Ukraine – one is Zoe, which is an urban car, and another one is Kangoo Z E, which is a small light commercial vehicle, a perfect tool for people who love driving a lot, and it is zero-emission trying to make it as clean as possible inside the cities.

: What obstacles did Renault meet when entering the electromobile market in Ukraine?

F. Mariotte: There are 2 challenges. The first challenge is to change the mindset of people to make them really believe that electric cars are accessible. When you look at the car market, 99% of it is not electric in Ukraine. It takes time. This is why our job is to promote electric cars in Ukraine and in Europe. It is working. When you look at such countries as Norway, for example, they are promoting heavy electric cars and it is obvious that carmakers are following that, and when you use combinations of both actions, you see that a car market is bringing a lot because it makes sense to buy an electric car. So, the first point is to change the mindset of people who think that it will take time, and our job is to do this. The second point is the technical issue because we need to increase the autonomy of cars. Now, Zoe with a new battery has a 300 km real range, so you don’t need to charge the car every day, but every week or even more rare. It is something that is working technologically well now. It is also the question of asking private companies to invest in the system of charging cars. Changing the mindset will lead to the change in terms of the technical challenge and the range of cars. With the range, we can win the battle. We are now delivering 200 km that is enough for the daily usage of a car and we still want to invest especially in Ukraine, in its infrastructure to get the possibility to charge cars everywhere.

: How long have you been the CEO of Renault in Ukraine?

F. Mariotte: 6 months. I am still a brand new guy. That is interesting because when you come to the country when you are in a new position, you come with new eyes. It is something that remains for just a few months and I need to take advantage of taking this new vision on the country. This is why when I work on a daily basis with my team, I often come with new ideas, new ways of thinking and working. I am coming with a deep belief in the potential of the country. I do believe that Ukraine and its market will change in the next years. I was working in the Czech Republic, Slovakia, Hungary, Yugoslavia and it was 10 years ago. I have seen those countries and the changes. I remember many things that were like what is here in Ukraine today and when I come back in those countries—I was in Prague a few months ago—I see the difference and all the evolution that is going fast. When you look at those countries for 10 years—from the first to the tenth year—things have changed a lot. This is why we have to believe in Ukraine. If Ukraine has the possibility to open itself to the modern universe (which is technically Europe), Ukraine has plenty of strengths to develop.

: What can you say about Ukraine in one word?

F. Mariotte: Believe in Ukraine. It is my position to believe with my stomach not only with my head. I do believe in the potential of the country. I can’t tell you how fast it will be, but when I look at the country with my experience, I do believe that Ukraine will develop and the situation for the population will improve. This is what I believe in. I will tell you a better story: when I was invited, I told this my daughter who is 14, she took her phone to ask Google about Ukraine and what appeared on the screen is the war and corruption, so this is also the challenge for the country. Ukraine should also solve the remaining conflict if you want to attract foreign investors and develop the country.

There are now investing in electric panels and this is a very good way to say: “Okay, there is a former country and there is a future country”. It is symbolic, but it is a very positive action to close one door and open a new one. The country needs to solve the corruption issue. The challenge for the country is to change what is appearing on the screen when you search for “Ukraine” in Google. This is definitely possible.

: Is Ukraine Renault profitable in the Renault Group?

F. Mariotte: Ukraine is profitable, but it is a growing country. When you look at the size of the car market, it is not growing as fast as expected at least this year. Nevertheless, Ukraine is a profitable country for us, even if it is challenging because the pressure on car pricing is huge. The challenge of the country is also to control the import of used cars, because when you look at the car market, 90.000 cars will be a stable figure compared to the past year, and there is plenty of cars imported both officially and unofficially. When I look at the quality of those imported cars registered in Lithuania, Poland or other European countries, I understand that this is definitely an issue. The country has to consider that the quality of imported cars is poor. We are talking about cars sold as new ones in Western Europe, in Germany or France, then in Poland, the Czech Republic or Lithuania. When I was there 10 years ago, I owned both cars coming from counties of Western Europe as France or Germany and cars coming from Poland and the Czech Republic. I am now in Ukraine and those cars are coming from their third life. Therefore, it is the third life of the car.

Those cars were not exported to Ukraine previously, they were exported to Romania, but cars were exported to Africa 10-15 years ago. Very old “third life” cars of 15-20 years old were exported to Africa. African countries have now stopped importing those cars because when they looked at what was imported in terms of pollution and safety, there was a huge negative impact on the country’s social condition. Therefore, those cars are very old and not compliant with modern safety rules and pollution. The issue for the country is to control the quality of imported cars and our job as the carmaker is to make cars become more affordable for Ukrainian population as when you buy a new car, you know what exactly you buy. You get a safe car with the best level of air pollution. It is all about trust. When you buy a new car, you can trust. There are guarantees with a carmaker and the network behind. It is very important for us to make our models more affordable, to come to the market and propose a financial solution. For example, we are selling Renault Sandero, at the first place in our price range, which costs 289.000 UAH, so it is too expensive, but when you look at 289.000 UAH and compare it with the price for imported cars, you won’t see much difference. We are also offering good credit conditions to our customers. We are trying to bring such kind of affordability for a new car as it is much safer than a used car.

: What are the most popular Renault cars in Ukraine?

F. Mariotte: The most popular and the most sold car of the company is Renault Duster, a sports efficient vehicle. It now takes half of the market in Ukraine and is a trendy model in Europe (including Ukraine). We are also offering other models such as Captur, Kadjar, Koleos. There is a complete range with different prices to cover that 50 % of the market. Duster is the first model. The second model is Logan and Dokker and Sandero take the third place. Logan is also a sedan that you can buy for 300 000 UAH. Sandero is a hatchback and we have Dokker, which is a small LCV.

: What are the latest achievements of the company and what are your plans for the future?

F. Mariotte: We are leading the market and we want to remain #1 in the country, it is the question of trust. I mean if we trust that there is the potential of the country, we need to invest in this country to develop the network. The global leadership is important for us, we are also leading on the fleet market. Buying Renault means that you trust the network, the service and us. We are also leading on the light commercial vehicle market (LCV). We have a strong position. Our network is about 34 dealerships. We plan to develop this network and increase the number of dealerships up to 50 in the next 3 years. We need to get dealers and more points where we can sell and maintain cars. It is also about making people’s life easier. The ability to maintain cars where you live makes the life comfortable. We plan to be a leading company in the market, developing the network and improving our performance inside this market.

: What problems does the Ukrainian car industry meet?

F. Mariotte: The automotive industry is about heavy and expensive investments. Ukraine is one country among plenty of others, which are able to make cars. Poland, Hungary, Slovakia produce cars, why shouldn’t it be the same in Ukraine? If you want to ask a big company to invest a million euros in a new factory, it is about trust. We need to solve the corruption and conflict issues. When these two problems are finished, let’s look at the strengths of the country: high level of education, there are a lot of engineers and IT people, whose education is absolutely compliant with the level of EU countries. I mean this level is competitive on the international market. Again, it is all about trust, we need to solve old problems and develop the strengths of the country, especially education. We are in the heart of Europe, large markets are not so far in terms of logistics costs. It is up to us to develop Ukraine and make it more attractive to other countries around us. It is competition.

: We know that you have been working for the Renault Group for a long time. What positions did you use to hold before coming to Ukraine?

F. Mariotte: I have been working for the Renault Group for almost 30 years in 4 different countries: France, Bosnia-Herzegovina, Portugal and Czech Republic. Before coming to Ukraine, I was a Sales and Marketing Director for Dacia. Dacia is our brand sold in 44 countries and the first model sold in Europe in the private market. I also was a Sales and Marketing Director for Vans. So, my experience in the Renault Group is 100% in sales and marketing. In Ukraine, we try to bring all the experience I got before, to bring contacts of people from the Renault Group, to make Ukraine more visible and to receive more support from Renault in Paris to develop our business here.

Please read: Establishing fair and transparent rules of the game begins with the business itself

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