Renault Laguna 2007 Review

Believe me, Renault really, really wants to sell its new Laguna flagship. When I tuned in to watch Arsenal versus Manchester United a few weeks back, a TV ad ran for the new car in the spot just before kick-off. That must have cost kerzillions.

Strange too, when you think of the volume of Lagunas Renault is likely to sell; comparatively, not that many. But the Laguna must be seen as a success because CEO Carlos Ghosn has made the Laguna into a key plank of his strategy to make the French company the most profitable in Europe.

In 2006 Ghosn outlined his ambitions for Renault generally and the Laguna in particular in his “Renault Commitment 2009” speech. The Laguna would be in the top three European models in the segment in terms of quality by then, Ghosn said.

Lead dog
Investment bankers also see the Laguna as the lead dog in the turnaround of Renault.

“The Laguna is expected to mark a dramatic improvement in quality and help restore Renault’s brand image and pricing position. Renault expects a 6 per cent plus margin from the new Laguna, where volumes are seen at 200,000 on a full year basis, down from the 270,000 peak for its predecessor as the segment contracts,” Citigroup said.

Deutsche Bank expects Laguna sales to peak a little lower than that, at between 160,000 and 180,000 a year, and points to another hurdle the Laguna will have to jump – seeking success in a shrinking segment. This large family car segment is sliding, and is likely to slip to 15 per cent of Western European registrations in 2007, compared with 23 per cent in 1998.

Cars like the Laguna and the Ford Mondeo are losing sales to well equipped smaller cars like the VW Golf, small MPVs like the Opel/Vauxhall Zafira and Citroen Picasso, and compact SUVs including the Honda CR-V.

Ghosn’s huge hurdles
Ghosn said Renault would be Europe's most profitable car company by 2009, and outlined three specific commitments for Renault to meet by then. Renault would boost annual car sales by 800,000 vehicles through the introduction of 26 new models over the following three years. It would also raise profit margins to 6%, up from 2005’s 3.2%. In 2006 the profit margin was 2.6 per cent, slightly better than the target of 2.5 per cent.

So what is the new Laguna like and what chance does it have of leading the charge to all of the above?

Inside, the quality is impeccable. The dashboard is fabulous and very BMW-like. The plastics are soft and feel expensive. The aluminium trim is neat. So far so good. Top marks. The version I drove, the 2.0 litre Dynamique S dCi 150, had electric front seats faced with suede and leather and satellite navigation. Surprisingly, (I have just finished driving a Proton GEN-2 with radar reversing) it didn’t have radar reversing.

Other engines available at launch range from a 1.5 dCi 110 bhp diesel to a 175 bhp 2.0 litre diesel with a particulate filter. The most powerful petrol engine is a 170 bhp two litre. No hint yet of a range-topping V6 petrol. The 1.5 litre diesel is said to return 55.4 mpg-5.1 l/kms and 136 grammes of CO2 per kilometer.

The new car is wider, higher and longer than its predecessor, but an average 15 kg lighter. Six speed gearboxes are standard. The optional automatic gearbox has six speeds.

Fantastically responsive
Fire up the engine using the starter button (you can keep the key fob in your pocket; its radio waves will liaise with the car’s computer and electronically acknowledge your right to drive) and the motor is impressively quiet, even from the outside. The diesel is fantastically responsive over about 1,800 rpm, but you will need to use the gearbox to make it go. Unfortunately, the gearbox is so-so, feeling a bit vague from 2^nd to 3^rd. I repeat my plea for an indicator on the dashboard which shows which gear you are in. On the highway in top or 5^th gear the performance is magnificent - quiet and with immediate response to your demands for acceleration. On the twisty bits, ride and handling was premium quality.

Make a sales rep very happy
What’s not so good? For such a big car, the room in the rear was surprisingly restrictive, with the front electric seats set for my 6 feet nothing. There was no handle on the boot lid to grip on when you opened it, so you have to place your fingers under the bodywork. Once open, the boot was fine, very long but not that deep. And the sat-nav was irritating. Nothing new there. Why don’t sat-nav makers introduce a simple on-off button? And surely a simple, direct way to put in a post code must be job one for the designers?

Overall, this is a very impressive car. It will make some lucky sales rep very happy. But will it fulfill its mission set by Ghosn to worry BMW, Mercedes and Audi? I think not. It really falls at the first fence. For a car with luxury pretensions to worry the entrenched opposition, it must have an exterior design so sexy, so attractive, that it turns heads and immediately makes potential buyers say “Wow! I must have that”. Rather like the Jaguar C-XF concept car. But the Laguna looks ordinary and derivative; inoffensive; but that’s not what’s required.

No earnings impact
Stephen Cheetham, auto analyst at stockbroker Sanford C Bernstein, doesn’t expect much profit impact from the Laguna, or the little Twingo city car which also about to hit the showrooms.

“Neither of these cars is likely to move the earnings needle in our view: …….. the Laguna had no impact when last renewed in 2000,” he said, adding that Renault’s earnings resurgence is still two years away after the launch of the crucial new Megane later next year.

Neil Winton – December 15, 2007