Competitive Strategies in the World Market: The Case of Renault and the Emergence of a European Group?

Abstract

This chapter focuses on the recent strategies of one French national champion, the state-owned group Renault. At the same time, it reflects upon the strategies of all the main independent European car manufacturers. For they all are facing increasing competition from new Asian competitors and have tried to implement the same policy responses: first, improving their approaches to designing, manufacturing and delivering attractive new models, and, secondly, growing through internationalisation. All the groups — including Renault — have achieved some success in relation to the first objective. But all have failed in relation to the second: none became a truly global competitor; all remained heavily dependent on European markets, and often on their own national market. Renault’s failure in the USA and its weaknesses in internationalisation in the 1980’s are symptomatic of this wider tendency. Therefore the attempt made by Renault between 1990 and 1993 to construct a strategic alliance with Volvo can be seen as an exemplar of a new form of strategic response which could be adopted by other European groups. Indeed, three months after the failure of the Renault-Volvo merger, BMW took over Rover.