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- 16 May 2013 13:33 VW expands China capacity with new Changsha plant
- 16 May 2013 12:18 Dacia kicks off in Denmark with Lodgy launch
Is Renault’s future electric?
Interesting times for the French half of the Renault-Nissan alliance. With Europe’s economy still mired, Renault’s reliance on its home continent has seen it outshone in recent years by its Japanese partner. Overall, the Renault-Nissan Alliance captured 10.7% of the global market in 2011, up from 10.3% the previous year.
Alliance chairman and CEO, Carlos Ghosn, expects Nissan to extend its lead as the biggest player in the Alliance and to outstrip the global forecast. He expects Nissan to increase sales by 10% in 2012, to a record 5.35m vehicles, as part of a plan to achieve an 8% global market share and 8% operating profit margin by March 2017.
Nissan shifted 4,669,981 units in 2011, with impressive growth of 14.4% on 2010. By contrast, last year, Renault sold 2,722,062 units worldwide, up 3.6% on 2010 sales. Even Russian AvtoVAZ Lada, now a full member of the alliance, saw more rapid sales growth in 2011, up 10.9% to 637,179 units.
Nissan, of course, has a more even geographical spread, with a strong presence in the world’s top three markets – China, the US and Japan. Renault is largely absent from all three. But then again, the global nature of the alliance gives balance, so perhaps this is somewhat harsh. Nevertheless, Renault has moved to address some of its weaknesses. And while a US market entry is unlikely, Renault has built plants in Brazil and India and formed a new Chinese alliance with Dongfeng, Nissan’s long-standing partner.
The financial results look OK too, with Renault group revenues rising 9.4% year-on-year in 2011 to €42.628 billion and operating income almost doubling to €1.244bn versus €635m in 2010 – which pleased Ghosn: “Thanks to the hard work of all its employees, Renault coped with the different crises faced throughout the year, exceeding the free cash-flow objective for 2011.”
In particular, Ghosn highlighted the strong performance outside the EU: “The 19.2% increase in group sales outside Europe, notably in Brazil and Russia, illustrates the group’s international growth. In 2012 we expect international sales to be well in excess of 43% of the total.”
Sales outside Europe reached a record 1,172,686 units, driven by fast-expanding markets such as Russia (up 40%), Turkey (up 13%) and Latin America (up 10%). In total, six of the Group’s top ten markets were located outside Europe in 2011, with Brazil replacing Germany as Renault’s second-biggest market after France.
Renault’s sales in Brazil, where it plans to expand capacity in 2013, grew 21%, in a market that expanded just 3%, to a record 194,300 units. Renault market share stood at 5.7%, up 0.9 percentage points from 2010 and powered by demand for small cars such as the Sandero and Clio hatchbacks, and the Logan saloon.
In Russia, Renault posted both record sales and market share. Sales jumped 60% to 154,734 units, making it Renault’s fastest-growing market. Market share rose to 5.8%, up 0.7 percentage points from the previous year. Sales were led by Logan and Sandero as well as the Fluence mid-size sedan.
In Europe, Renault remained the second-largest brand after Volkswagen taking an 8.6% share of the passenger car and light commercial vehicle market. In Europe, sales rose in certain markets: Netherlands (+16%), Germany (+9%), Austria (+9%), and Belgium/Luxembourg (+5%). But sales fell in others, notably the economically troubled southern European markets of Portugal (-30%), Spain (-17%) and Italy (-10%).
Renault’s top-selling passenger cars in Europe were the Megane, Clio and Twingo, suggesting that Renault’s strength remains with the private buyer of smaller cars rather than large fleet customers.
This doesn’t apply to the van sector, where strong fleet sales continued to make Renault Europe’s light commercial vehicle leader – for the fourteenth consecutive year – with a 15.6% market share.
Renault expects the global market for cars and light commercials to grow 4% year-on-year in 2012 with markets outside Europe continuing to grow, especially Brazil (5%) and Russia (8%). By contrast, the continued economic uncertainty in Europe is likely to result in the European market shrinking once again, by 3% to 4%, including a decrease of 7% to 8% in France.
Van sales are particularly strong in Renault’s home market, and have helped the company maintain a steady market share in France against the backdrop of a declining market.
In 2011, one in three vans registered in France was a Renault model. Renault’s leadership position gave it a 32% market share (36% for the group, including Dacia LCVs). Three vehicles – Kangoo, Clio van and Master – took the top three places in 2011. A new Trafic is due in 2014, and this will be built in France as well as Spain and the UK.
The alliance with GM will continue, but the manufacturing arrangements have been changed, so the GM Luton plant in England will now produce solely for Opel/Vauxhall (which sell the van as the Vivaro), while Renault will build its own new Trafic at Sandouville in northern France.
Strong LCV sales helped Renault maintain leadership in the French fleet market, with a share of more than 30%. However, fleet sales of passenger cars declined steeply by 3.6 percentage points. Renault puts this down to pulling back from aggressive pricing policies in the fleet sector.
Overall Renault group car and van registrations, including Dacia-brand vehicles, declined by 7.5% in France in 2011 compared with 2010. The group took 26.1% of the market, down 1.7 percentage points on 2010. Renault brand sales fell by 6.4% and Dacia by 14.4%.
Renault group car sales accounted for a 24.7% market share, roughly the same share as in 2010. Clio and Mégane were the top two sellers in France, and four Renault group vehicles were among the French 2011 top ten best-sellers list: Twingo at number 6, and Dacia Duster at number 10.
Maintaining share is seen as a decent achievement – as well as a weak domestic market, depressed further by the end of Government incentives in 2010, Renault sales in the first half of 2011 were hit by the effects of the Japanese Tsunami. Renault’s sales recovered strongly in the second half of the year, especially among private consumers, where the Group is market leader with a 25% share.
The situation is not likely to improve until the second half of the year. Bernard Cambier, senior vice president, market area France, said: “2012 is going to be tougher. The car and LCV market is likely to contract by 7% compared with 2011, with a steep fall of around 17% in the first quarter. Against this backdrop, the Renault group’s performance in the early part of the year will slacken, particularly for the Dacia brand. Nonetheless, the Group expects to at least maintain its sales performance at 2011’s levels, with Dacia sales surging in the second half of the year.”
Outside Europe, Renault is strongest in South America. The Group turned in record sales and market share (6.1%) with nearly 400,000 vehicles sold from Mexico to Argentina. Brazil is now the Renault group’s second-biggest market, after sales there rose 21% in a market that expanded by 3%. The Renault brand set new records for sales (194,300 units) and market share (5.7%).
In Argentina, sales exceeded 106,000 units for the first time, rising 29%. Market share was 13%. The brand’s success in Brazil and Argentina is being driven largely by Renault Sandero Phase 2, which was launched in Spring 2011 and developed exclusively for these markets. Renault Duster, launched in October, was also well received.
In Mexico, where volumes were up 28%, the Renault brand achieved its best ever showing for market share since 2001 (2.6%) and sold 23,132 units. In Colombia, the Renault brand posted record sales, with 46,820 units, 23% higher than in 2010, and consolidated its No.2 ranking in the market with a 15.6% market share.
India is seen as a key market for Renault, which has built a major new plant near Chennai. This is an alliance plant that also builds Nissans. It has a capacity of 400,000 units, but in 2012 is likely to produce around 30,000 Renaults. In 2011 Koleos and Fluence were launched, and in 2012 the range will be expanded with the addition of three new vehicles, including the Duster.
Not counting the AvtoVAZ operation, which is now under the control of the Renault-Nissan alliance, the Renault brand recorded both record sales and market share in Russia, with a 60% increase to 154,734 vehicles sold and a 5.8% share of the market. The Renault brand ranks among the top five on the market, thanks to the success of Renault Logan, Sandero and Fluence. Vehicles are built at a plant in Moscow, Avtoframos, the site of a former Moskvich factory.
Renault has struggled in the UK recently, with sales tumbling in 2011 to 68,449 cars, a fall of 28% over 2010. Market share dropped from 4.71% to 3.53% last year – a far cry from Renault’s late 1990s heyday when levels around twice that were achieved.
A number of factors have contributed. Laguna has sold badly since the second generation model was launched in 2001, and the third-generation model has done little to improve competitiveness in a sector that has both declined and shifted away from volume brands.
As a result, Laguna is one of a number of models to be dropped from the Renault UK range at the start of the year as part of sweeping cutbacks. As well as Laguna, Espace MPV, Modus compact MPV and Wind sports car have all been axed, as well as passenger versions of the Kangoo LCV.
This has left Renault with a streamlined four-model range in the UK comprising just Twingo, Clio, Megane and Scenic. Renault claimed combined sales of these models accounted for less than 10% of its UK volume. A new Espace is due in 2013, and this is likely to be reintroduced to the UK.
In place of the withdrawn models have come a range of four electric cars, plus, finally, a UK launch for the Dacia budget brand, with RHD Sandero and Duster models being sourced from India. The Dacia brand will be sold through Renault dealers.
Renault’s UK restructure also involves a reduction in its dealer network by around one-third from 190 to around 135 by the end of the year, and a 50-person headcount reduction at its Rickmansworth head office.
The restructure also means Renault has throttled back heavily on fleet business in the UK. Sales director, Darren Payne said last year that Renault UK would be pulling out of all fleet business except “true fleet sales”, apart from a small volume of van rental, and this will result in Renault’s fleet share halving over the next year.
Payne said the company had taken the decision to only sell cars that were inherently profitable and not dependent on the strength of the pound against the euro to create margins, as well as pulling away from doing expensive fleet business just for the sake of volume.
Much of the surviving fleet business is likely to be LCV-driven, such as a recent deal for Interserve, an international support services and construction group, which last December awarded a contract to Renault UK for the supply of more than 400 LCVs following an extensive tender process. The new fleet includes Kangoo, Trafic and Master models.
Renault’s revival of the former Communist automaker Dacia, based in Pitesti, Romania, has been one of the automotive successes of the past decade. Dacia now has a range of low-cost models, and the brand has been developed as a ‘value’ brand within the Renault-Nissan alliance.
Renault has long links with Dacia – the factory has produced Renault-based vehicles since it started production in the late 1960s. Dacia managed to survive through the post-communist years, becoming part of Renault in 2000. A range of low-cost models – project X90 – was revealed in 2004, starting with the Logan sedan.
Further investments have seen additional models – panel van, MCV (station wagon) and pick-up derivatives of Logan, and then separately-branded hatchback, (Sandero), SUV (Duster) and MPV (Lodgy). All use the same common platform and running gear.
The brand has been extremely successful – not just in emerging markets, but in Western Europe, where it has sold strongly in both France and Germany. France is the biggest export market for Dacia, with 94,000 units, which represents a 3.5% market share. Germany comes next, with 43,452 Dacias sold, up 7.8% on 2010. Sales in Italy increased by 15% to 26,838 units.
The cars are sold through Renault dealers and are sold on a no-haggle fixed-price basis, targeting private customers – there are no fleet discounts.
Dacia sold 343,233 units worldwide in 2011, including 240,000 in Europe. This was down slightly on 2010’s 348,723 vehicle sales. The top selling model was the Duster SUV, with 161,200 units sold, followed by the Logan models (95,452) and Sandero (86,578).
In Romania, Dacia sold 30,867 units, the majority being Logan (21,099). This is 16% fewer than a year before, when it sold 36,730 units in Romania. As the Romanian car market dropped by 8.3% in 2011, Dacia managed to retain 28.9% of the total sales.
Other strong Dacia markets include Morocco (22,356 units), Turkey (21,339) and Algeria (19,242). Spain comes next, with 15,641 units, followed by Belgium (14,700), Poland (7,382), Switzerland (6,051) and Austria (5,697).
In France, Dacia was the number seven passenger car brand in 2011. Sales fell 0.6% last year to just under 90,000 units, though this was due to the expiration of government subsidies for LPG powered vehicles and to engine supply constraints stemming from the tsunami in Japan. Maximum use of production capacity from September onward was not enough to offset the first-half fall in output.
In France, Dacia ranks number five for sales to private consumers. The new Duster SUV was ranked the sixth most popular model among private consumers, with 2011 sales up 165.5% on 2010. UK sales are due to start in June 2012, initially with the Duster and Sandero models.
A cornerstone of Carlos Ghosn’s plans for Renault is electric vehicles. You could argue he’s betting the farm on it. Renault has launched an extensive EV programme, seeing the launch of four battery-electric vehicles this year.
These range from the Twizy two-seater to the ZOE hatch, Fluence Z.E. saloon and Kangoo Z.E. MPV and van. The Renault Nissan alliance will have the capacity of 500,000 EVs by 2013 worldwide, so it is well placed to service any sales boom.
Renault estimates electric vehicles will represent around 10% of automobile sales in France by 2020, and it wants to be the leading player. Initiatives include an alliance with French supermarket chain E Leclerc to set up 500 EV charge points in the car parks of 50 of its hypermarkets as a plan to bring about massive EV charging infrastructure to France.
Electric vehicles are being targeted largely at fleets – especially companies that want to implement corporate environmental responsibility programmes. Already a large number of French companies have placed significant orders for Kangoo Z.E. vans.
Last October Renault announced orders for a total of 15,637 Kangoo Z.E. vans from 19 French companies, including 10,000 for La Poste, 1,500 for ERDF, 1,200 for UGAP, 510 for Veolia Environnement, 450 for GDF-Suez and 330 for Spie.
Renault Kangoo Z.E. is priced from €15,000 in France (ex-VAT, and including a €5,000 Government environmental bonus). The vans come in two wheelbases and are produced at the Maubeuge plant in France alongside internal-combustion Kangoos.
The first UK fleet order – six vans for advertising company JCDecaux, was placed in April, six months ahead of the vehicle’s British launch. The vans will be used to enable staff to travel between JCDecaux’s UK sites, which cover all major cities, including London, Manchester, Birmingham and Glasgow.
Meanwhile two leading UK eco-chauffeur fleets have taken delivery of Renault’s new battery-electric saloon, the Fluence Z.E. Climatecars and Greentomatocars, which run large fleets of Toyota Prius hybrids, are each running two of the five-seat saloons, on a six-month trial, and both companies are believed to be considering adding the vehicle to their fleets on a permanent basis.
The Fluence Z.E. is a 100% electric private hire vehicle with a range of up to 115 miles on a single charge. All four Fluence Z.E.s are based in Central London, with both companies ensuring their costs and electricity usage are minimised through charging via the Source London network and their own in-house charging points.
Greentomatocars said it would use the Renault Fluence Z.E. strategically for specific shuttle runs and events for its clients, rather than day-to-day private hire duties. “Using the vehicles for these purposes, such as between a company’s office and the nearest station at the start and end of the working day, maximises the reduction in emissions, and ensures the vehicles stay well within their daily mileage limits,” said managing director Jonny Goldstone.
Even the Twizy electric quadricycle has fleet potential. Telecoms company Orange has ordered 100 Twizys as part of ongoing plans to reduce CO2 emissions and energy usage. The vehicles, which are on a long-term lease through Arval, will be provided to employees on a loan basis for urban business use, with the first 14 examples already deployed in the Ile-de-France region.
Orange fleet management director Jean Zermati said Twizy could be added to fleets in other countries depending on suitable duty cycles and a supporting service infrastructure. Twizy joins a number of plug-in vehicles already deployed on the group’s French fleet, including the Renault Kangoo ZE, Renault Fluence Z.E, Peugeot iOn and Toyota Prius Plug-in.
By the end of 2013, Orange is aiming for have “several hundred” electric or hybrid vehicles in use globally, contributing to a planned 20% reduction in CO2 emissions and 15% reduction in energy consumption by 2020, compared to 2006 levels.
16 Jul 2012 10:35