Renault and Matra on Minivan Business

534 Words3 Pages
Why was Renault and Matra's Espace so successful in the minivan market for over a decade? Give a short answer. The most apparent element of the success is that the two companies made an alliance to bring their specific advantages which were essential to produce and sell “Espace” with the best role of the first mover in the early phase of the emerging market of minivans in Europe. The keys of their success were those respective strenghts of Matra and Renault : - in design and developpement, Matra had a very good design experience in racing and only needed a short term developpement (about 40% less than average), with low investment, to introduce a new car into the market. - in term of production, in one hand Matra mastered the SMC production technology and used outsourced components for its manufacturing. At the same time, Renault was able to supply one third of the total parts and mechanical components for the Espace. - finally, in term of sales and after sales, Renault had already established its brand, settled its dealers and set up its service centers. Why did competitors have to join forces to enter the minivan market? By joining forces to enter the minivan market (such as Ford and Volkswagen) the manufacturers are able to similarly co-developed models on a common chassis and built them in a shared-plan (50%-50%). So both parties are equally invested in the project in terms of money, time, and effort to build on the original concept. Since the cost of starting new projects is generally high, this alliance of two competent automakers allows both parties to share the burden of the project, the risks as well as the resulting profits with their partner. They can also increase their respective capacity, access to greater resources including specialised staff, and technologies, develop their production capabilities and learn new know-hows from their

More about Renault and Matra on Minivan Business

Open Document