Renault aims for No.2 spot with the Twingo

Renault aims to challenge Fiat's decade-long dominance of the minicar segment with its new Twingo.

"I would like to see the Twingo in the number two spot in this segment," Stefan Mueller, the company's Europe chairman, Mueller told Automotive News Europe in an interview.

The Fiat 500 was Europe's selling minicar last year (see chart below), followed by the Fiat Panda at No. 2 and third-placed Volkswagen Up.

To pass the Panda and Up, Twingo sales would have to be double the car's 2013 volume.

Renault has not released prices or sales targets for the Twingo but Mueller said the company will not be offering the minicar at a low price to win sales. "We won’t do anything just for the sake of volume,” he said.

The Twingo was unveiled at the Geneva auto show earlier this month and arrives in showrooms this summer. The car shares its platform with Daimler's upcoming Smart ForFour four-seater. It has a rear-mounted engine, making it roomier than competitors. It is rear-wheel-drive and can turn in a very tight space, a plus for drivers trying to park in Europe’s cramped cities.

The minicar segment is getting more competitive. One third of the top 20 minicar models will be either all-new or new-generation vehicles by the end of this year. This massive product refresh could boost sales to 1.3 million units in 2016 from 1.1 million last year, said IHS Automotive.

Tougher C02 limits looming in 2020 and a recovery of the Italian car market, Europe’s largest for minicars, is also seen boosting flagging sales of Europe’s third-most popular segment after subcompact and compact cars.

Europe's 10 best-selling minicars in 2013 (unit sales)

Fiat 500: 160,015
Fiat Panda: 152,404
Volkswagen Up: 129,754
Renault Twingo: 77,714
Toyota Aygo: 63,770
Hyundai i10: 61,425
Citroen C1: 56,786
Peugeot 107: 55,242
Kia Picanto: 50,213
Ford Ka: 50,213

Automakers are also offering minicars with upscale features. Three-door cars like the 500 and the Opel/Vauxhall Adam are stylish and let customers pick from dozens of color combinations, enabling their manufacturers to pocket a higher margin than have been the rule in this low-profit segment.

Renault has not said if it will price the Twingo at the upper end of the segment. The base price for the Fiat 500 is 12,310 euros in Italy.

The Twingo’s price "will be competitive but will respect the value of the product, like we did with the Clio and Captur," Philippe Klein, Renault’s product planning chief, said.

"Thanks to our partner Daimler we have a new platform, which is very interesting because it has a rear wheel drive architecture that no competitor has," he said in an interview. "This will give our customers real advantages, such an high maneuverability, good visibility, a small turning circle – one meter less than the best competitor – and a lot of space inside. We think we have made a very interesting car that will give us chances to be successful."

Klein said Renault is not planning to launch a battery powered version of the Twingo. "The new platform that could host an electric version, but we decided not to do it for now. We already have four electric models in our range and we considered it was not necessary to add the Twingo at this stage," he said.

Claire Bal and Nick Gibbs contributed to this report HERE