Strategy of the Renault group

In 2007, Renault had produced figures in line with expectations, with operating income of 1.35 billion euros and a turnover of 40.682 billion euros (up 1.78%).The bottom line was the confirmation of the forecast for the year 2008’s operating margin of 4.5%, as well as 2009’s commitment of 6% with an increase of 800,000 vehicles since late 2005.

The slower than expected start of the Laguna is also confirmed due to a decline in the segment, particularly in France and Spain (CO2 tax) and is backed by a difficult entry into the fleet. The 2008 forecast of Laguna was indicated to be at the bottom of the range (160 000-180 000 units).However, we see good numbers of the Twingo and Logan.

Overall, the sales are expected to benefit progressively with the launches in late 2007 and early 2008 in Europe and the rise in production capacity of Logan in the world. The group still expects an increase in volumes greater than 10% over the year.

In 2007, Renault and Nissan sold a total of 2,484,472 and 3,675,574 units, Renault's worldwide sales began rising by 2.1%, while Nissan's rose 5.7%.The main growth areas for the Alliance were Russia (49.9%), Latin America and South America (12.6%), China (+25.6%) and the Middle East and Africa (+16.2%).

While Renault returns to growth, Nissan sold a record number of vehicles under the Nissan and Infiniti brands, or 3,675,574 units, representing an increase of 5.7% over last year. Nissan recorded its sales exceeding 1 million units for the third consecutive year, thanks to a 4.8% increase on the U.S., its largest market.

In Japan, Nissan's total sales were down 6% to 720,973 units.In Europe, the annual sales increased slightly. With a strong demand in Russia, up 59.6% over 2006, the success of Qashqai offset the conditions in mature markets.

In the case of other global markets, Nissan sales increased by 8% to 1,024,683 units. In China, in 2007, sales were up 25%, and were driven by the success of the Tiida model and new models.

The last graph above is quite revealing of the state of the alliance between Renault and Nissan. Indeed, while Renault reported an operating profit of 1.3 billion euros, Nissan achieved an operating profit of more than 77% operating margin in the alliance. With a share of nearly 65% of sales in 2007 of the alliance, it began to be very well established in the largest markets namely the U.S. markets and Asian markets that allowed the alliance to climb the world's fourth largest automobile groups in terms of production volume (behind General Motors, Toyota and Ford).

However, given the difficult economic conditions expected in the U.S. market in 2008, the exhibition of the alliance in the U.S. market appeared to have left some difficulties that were to come: 27% of sales of vehicles made by Nissan are in the U.S. and 27% of sales of Nissan constitute 17% of total sales of the alliance. Thus, it is hoped that emerging markets in 2008 continued to drive growth in sales in the automotive industry to limit the impact of U.S. recession on sales of the group.

Tags: Renault -Nissan alliance, Renault strategy, green technology

[...] 1-4-2 High-end positioning: a catalyst for the group's profitability The launch of the new Laguna in October 2007, is the beginning of a renewal of the range that Renault plans to continue in 2008 on its high-end models (and Samsung SM7 Koleos SUV to come).The group reiterated its assumptions for the Laguna margin to be greater than that of the group and in fact, what is known as the high end (beyond a sale price of 27 000).This includes the "high" versions of the Laguna, sold from Espace, Vel Satis (for memory), the Megane CC, and some versions of the Scenic. [...]

[...] However, Renault is able to maintain market leadership France / Europe on commercial vehicles, with and market share from 2005 to 2007.Note the progression of Ford (from in 2005 to market share in 2007), Fiat (from in 2005 to market share in 2007) and Volkswagen (from in 2005 to market share in 2007) while Renault regressed over the same period. 2-3-2 emerging market: new special field of competition The Western European markets are saturated, it is understood that there will be more investment in capacity on them, and that any new sites will be installed in new markets where demand is stronger. [...]

[...] In China, in 2007, sales were up and were driven by the success of the Tiida model and new models Below are the key figures of the Renault / Nissan The last graph above is quite revealing of the state of the alliance between Renault and Nissan. Indeed, while Renault reported an operating profit of 1.3 billion euros, Nissan achieved an operating profit of more than 77% operating margin in the alliance. With a share of nearly 65% sales in 2007 of the alliance, it began to be very well established in the largest markets namely the U.S. [...]