Q How would you describe Renault’s global strategy and how does Colombia fit into it?
A In February 2006, Renault chairman Carlos Ghosn announced the Renault Contrato 2009 plan, the aim of which is to position the brand as the most sustainably profitable European car manufacturing company.
SOFASA (Sociedad de Fabricación de Automotores SA), as Renault’s subsidiary in Colombia, stepped up to the challenge from the very moment Contrato 2009 was announced, applying the head-office guidelines in all areas of its business, and inviting all workers, dealership networks and suppliers to participate actively in this strategy, because we are utterly convinced that it is the best and only way to become more competitive.
Through rigorous and co-ordinated efforts, we are contributing to the achievement of the worldwide objectives established by Renault, and making a commitment to its global strategy.
Q When did Renault make its first investment in Colombia and what motivated this decision?
A In January 1969, the national government selected Regie National des Usines Renault, France, to form a car manufacturing company in Colombia. Thus, SOFASA was set up with the purpose of assembling vehicles of the brand and stimulating the development of the national car and car parts industry. Industrial operations commenced on July 14, 1970, with the commercial launch of the Renault 4.
In 1994, the company began exporting to Ecuador and in 1995, it entered the market in Venezuela.
Q What is the size and scope of the company’s operations in Colombia?
A The industrial activity of SOFASA is specialised by brand. We assemble Renault passenger vehicles, Toyota utility vehicles, and the Daihatsu Delta. The company has also worked towards the objective of increasing the scale of production and lowering risk, through the diversification of its activities. It has therefore sought not only to expand into the sub-regional Andean market, but also to supplement the product portfolio with imported vehicles. In the course of more than 36 years across the brands, SOFASA has produced and marketed more than 650,000 vehicles.
At the present time, the division of SOFASA’s share ownership is 60% Renault, 28% Toyota and 12% Mitsui.
SOFASA has two head offices. In Chia, a town near Bogotá, is the commercial head office, with the office of the general management, the Renault sales, Toyota sales, legal, financial and government relations departments and RCI Services Colombia. This is also the site of the central parts warehouse and the training centre. Close to Medellín, in the town of Envigado in Antioquia, is the production plant and the human resources, production, planning, products and projects, purchasing and quality departments.
Q Have you been able to recruit people of the required quality and in the necessary quantity in Colombia?
A SOFASA’s human resources are its biggest asset: dedicated and entrepreneurial men and women, who take on risks and work as a team to achieve shared targets in an atmosphere that gives priority to respect and warmth, expressed through joint agreements rooted in the Integral Relations System between management and workers. This is regulated by the Collective Bargaining Agreement, under the auspices of which many benefits are provided in education, health and housing, as well as services and guarantees for employees and their families. Ongoing improvement, honesty and integrity are the values that define SOFASA’s human talent.
Q In what other parts of the world does Renault have manufacturing operations or administration centres?
A Renault is active in 118 countries. It is the world leader in safety, with eight of its vehicles having achieved the maximum classification of five stars in the safety tests of the independent body EuroNCAP. The company distributes in five regions (the Americas, France, Europe, Asia and Africa).
Q What changes in the Colombian legal, regulatory and business environment has the company observed since setting up operations in the country?
A The principal change that has occurred is the dismantling of the tariff protection that applied to the industry for a long time, which came about as a result of the integration of markets and, more specifically, following the commercial agreements signed by Colombia and the US, Mercosur and Mexico.
Another significant change that has taken place concerns the technological and environment regulations, brought about by the adoption of new technologies for vehicles (flexible fuel, alcohol fuels and biodiesel, among others).
Q What changes or improvements have taken place within the company itself?
A With the awareness that there is always room for improvement and that this is an ongoing daily process, since 1996 the company has promoted the Kaizen culture, using SOFASA’s adaptation of the methodology of the Kaizen groups of Toyota. This aims, with the active participation of the workers, to identify specific solutions.
For this there is a team of voluntary participants, trained in the methodology of analysis and problem solving, who receive ongoing advice from company professionals with experience in the area and in the application of the methodology. The Kaizen activity is a fundamental element because it promotes participation, teamwork and the recognition of the ideas of our workers. Kaizen studies have led to significant improvements being made in areas such as productivity, safety, ergonomics and quality.
As far as our customers are concerned, we are aware of the need for the ongoing improvement of our sales and post-sales processes.
Our objective is to continue consolidating Renault’s position in current markets and seek new opportunities in others, to achieve the profitable growth of the company, in line with the global objectives of the brands.
Equally, our priority will continue to be the service of our customers, to build their loyalty and make potential customers choose us, through good service, technical back-up, brand promotion and positioning, with our trademark seal of quality and safety.
SOFASA and the sales network are committed to achieving total customer satisfaction and, to this end, we offer consumers who choose Renault all of our technological and human resources.
Q From your perspective, to what extent has the security situation improved since President Alvaro Uribe came to power?
A s far as customers are concerned, and considering our excellent sales results, consumers undeniably now have much more confidence when it comes to buying a vehicle thanks, to a considerable extent, to the government’s democratic security policies. These have enabled Colombians to go back to making journeys by road – as we did previously – and consumers interest in purchasing new vehicles is increasing.
Q How would the free trade agreement between Colombia and the US affect your business?
A Opening borders will have a significant impact on the development of the car market in Colombia. The free trade agreement constitutes an important and imminent challenge that the industry must be ready to take on, but also represents an opportunity. We must be prepared to continue improving our processes, to be ever more productive and, in this way, continue achieving the competitiveness that the globalisation of the economy makes imperative.
Our great challenge is in maintaining the highest standards of product quality and customer service, so that this becomes an important point of differentiation. In the same way, the influx of vehicles from other countries is making it necessary for us to strengthen our manufacturing, marketing and post-sales service, in response to the potential of the current market.
In particular, SOFASA is focusing on four aspects: lower production costs, greater local integration (parts developed within the region), improvement of quality and reduction of logistics costs.