Warped Logic

Frenchman Bernard Coursa, the Renault director for south-east Europe is also the management board chairman at Revoz Novo Mesto, Slovenia. That practically means that he runs that Slovenian company which is majority owned by Renault. Last year, Revoz registered profits of 8.3 million DEM.

Reports that Revoz could be the Renault distributor for former Yugoslavia drew reactions from economic patriots in Belgrade. The owner of Belgrade's Interkom company is wrestling with Renault and using the mood of domestic buyers to blackmail the French car maker. The Serb-Slovenian intolerance dating back to 1989 was supposed to convince Renault to get rid of Revoz which assembles some vehicles for sale in this part of Europe. That was reason enough to talk to Coursa in a charming mixture of Slovenian, Serbian and French about the obstacles to economic links in the former Yugoslavia.

VREME: You just got back from Belgrade where Renault exhibited at the car fair. Will Revoz do business in Yugoslavia or not?

COURSA: "Renault will form its own company in Yugoslavia which will operate through a concession net, including Interkom. I see no problems there. I don't understand how anyone in Yugoslavia can even think that a big company like Renault can be directed by political criteria in choosing its authorized representatives or salespeople. I understand that Yugoslavia was blocked, closed for four years, that life was hard but we assumed that now after the embargo was lifted business logic had to prevail. No one in the normal world would ask which factory made the products for a certain market. Buyers ask themselves other more rational questions."

Why did you decide to import Renault vehicles to former Yugoslavia from the Revoz plant and not any of your other plants?

Revoz will produce only the models Cleo and Renault 5 which we produce there while the other models will come from our other factories in Europe. This is rational decision as any company in our position would take.

What is the status of Revoz and where do the cars it produces go?

Things are clear; Renault is the majority shareholder, owning 54% of Revoz. We build Cleos and Renault 5s in Slovenia under our standards and export them mainly to Italy, Germany, France, Austria, Croatia and Macedonia and I hope to Yugoslavia soon. We are restoring our net in Bosnia.

Despite that, some of the FRY press reported that if Renault cars are imported through Revoz they could be up to 30% more expensive?

That is nonsense which can only be stated by someone who doesn't know how the market works. Think about the interests of Renault as a whole. Our interest is to keep prices as low as possible to sell more cars. That practically means that if we didn't import cars to Yugoslavia from Novo Mesto but from Spain or Belgium the transport costs would raise the price.

Don't you think sales will be difficult in the FRY given the current circumstances?

Yes. We will have problems because that market is very protected. In calculating the final price we have to take into consideration the fact the customs to Yugoslavia now stand at 44%. We have to add taxes; 9% for up to 1,200 cc's and 26% for above 1,200 cc's. That means that if we set our usual prices, every car would end up costing twice what it usually does. On the other hand, if you compare the prices of Zastava cars or other rivals and our prices presented at the car fair, the comparison is a catastrophe. If you take one French franc to be equal to one dinar a Peugeot 106 costs 122,000 francs in Yugoslavia!

At current prices, a Renault 5 would cost about 70,000 dinars as would a Citroen AX. Everywhere in Europe that class of car costs no more than 11-12,000 DEM! But, in Yugoslavia, because of the high duties that class of car now costs as much as two Yugo Corals. Who will buy a foreign car under those conditions when you can buy a Yugo Florida for 45,000 francs.

Also, another problem on the FRY market is the unclear rules of operation. I won't say which corporation, but I will describe a paradox in which a Yugoslav company declared itself the only Yugoslav importer of a certain make of car. When they were asked if they have a contract with that international car maker they admitted they didn't but said they have a contract with the government! I don't understand how you can sign a contract with the government to sell foreign cars. I don't understand how anyone has the courage to speak on behalf of an international company like Renault. Politics is one thing, the economy is another! Those two things should not mix. In the end, it all creates the impression that Yugoslavia is not a state of law.

What if one of your concession holders in Serbia continues to disagree with your policies or the origin of the cars?

If any one of them disagrees with our conditions he can freely sell cars from a factory of his choice. He sells someone else's cars. Not ours.

Do you intend to work with Yugoslav companies, invest in them?

Our logic is to buy the parts that satisfy our quality criteria. We had suppliers and partners in Kikinda, Pancevo, Pristina and other FRY towns. A European country and economy with 12 million people will always be an important partner to us. We are interested in a normalization of the situation in the region. The opening of the Belgrade-Zagreb highway will make it easier for us to reach the FRY and other markets in the middle east. We are incurring losses because of the war. Yugoslavia has lost and its foreign partners. Because of all that I am convinced that our future, a better life for us all, does not lie in closing up but in opening up and mutual cooperation.