March 3, 2020 / 11:00 AM / a month ago

UPDATE 1-Renault's Alpine goes further upmarket as it looks beyond France

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By Gilles Guillaume

PARIS, March 3 (Reuters) - Renault's Alpine brand will launch a more luxurious version of its sleek A110 sports car as it looks to branch out from its core French market and consolidate a jump in sales last year, its chief executive said.

The Renault group, which also makes budget Dacia cars, revived the Alpine brand and its two-seater models in 2017, updating a classic design which hit a peak in the 1960s and 70s.

But the French company is struggling with slumping demand in emerging markets and outlined cost cuts in February to try to turn around a decline in operating margins.

Pricier models like the Alpine could help improve the group's profitability and growth in the longer run as the brand goes even more upmarket and plans more launches, Alpine Chief Executive Patrick Marinoff told Reuters.

"If you look at profit potential in the future, Alpine is the tool and the weapon for Groupe Renault to harvest that potential," he said in a telephone interview to replace an event planned for this week's Geneva auto show, which has been cancelled due to the coronavirus epidemic.

In the short term, Alpine is bracing for stalling growth after the hype of its first launches dies down.

Sales of the vehicle - which is produced in the northern French town of Dieppe and includes a motor from Renault's alliance partner Nissan - doubled to 4,835 in 2019.

"Looking at our numbers, we do not expect growth (this year)," said Marinoff, a former executive from high-end German brand Daimler.

"We had a fantastic record year last year. We had a fantastic start, but to expect more growth would be definitely too ambitious, we are looking at consolidation."

Alpine's latest version of the A110 will be a Grand Tourer, or a luxury sports car designed for long drives, with extra capacity for luggage and storage built in, as well as touches such as leather seating.

Its first production run will be limited to 400 cars, and prices will start at 69,300 euros ($77,100) - some 13,500 euros more than Alpine's most affordable models already in circulation.

The brand is looking to push into the likes of Germany, the United Kingdom and Switzerland and beyond France, where it made two-thirds of its sales last year.

"We intend to broaden the customer base," Marinoff said. "We will focus more on people who are looking for a certain lifestyle, for the refinement that a Grand Tourer can deliver."

$1 = 0.8987 euros Reporting by Gilles Guillaume; Writing by Sarah White; Editing by Mark Potter

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