Renault's business results improve thanks to European recovery and updated lineups

New Scenic compact MPV and Alaskan one-ton pickup to be launched in 2016

2016/10/14

Summary
Launching new Megane and Scenic, as well as the Talisman Estate in Europe
Europe: increasing production in France and Spain
Latin America: expansion of production facilities in Brazil and Argentina
China: Dongfeng Renault joint venture starts production of Kadjar
Other markets: activities in India, Turkey, and Morocco
Renault-Nissan to collaborate on development of technologies for autonomous driving and connectivity
Global unit sales for H1 2016 reach record 1,568,000 units
Operating profit for H1 2016 hits record high of EUR 1.54 billion
Production forecast by LMC Automotive: Renault Group's global production to reach 4.04 million units in 2019

Summary

Renault Group operating margin (Two years ahead of target)

"Drive the Change" midterm target achieved ahead of schedule

In its "Renault - Drive the Change" midterm business plan released in February 2014, the Renault Group set targets to generate EUR 50 billion in revenue and achieve an operating margin in excess of 5% in 2017. In 2015, Renault's revenue increased to EUR 45.3 billion and its operating margin 5.1%, to meet one of its midterm targets two years ahead of schedule. The Group will strive to boost revenue further through increased sales with rejuvenated lineups, and to keep its operating margin above the 5% mark by reducing costs.

Launching ten new models in 2016

Renault Group is continuing to aggressively release new products in 2016, launching models in Europe like a new Megane and Scenic, as well as the Talisman Estate. As for areas outside Europe, the Group will release the Kadjar compact SUV in China, Alaskan one-ton pickup truck in Latin America, a new Megane Sedan for some emerging markets, and new Koleos large SUV around the world.

Share of vehicles sold in Europe rises to 61.8% of global sales

While the European auto market returned to growth, areas outside Europe including Russia and Brazil are in a downturn. The share of vehicles sold in Europe has risen to 61.8% of the company's total sales in the first half of 2016. Outside Europe, sales in Africa, the Middle East, and India increased. In France, Renault's output in the country increased owing to production of Nissan vehicles and transfer of production from other countries in accordance with an agreement signed in 2013 with trade unions to boost plant activity and employment. Renault Group will also pursue its business offensive outside Europe. The Group will maintain all investment plans and extend its lineup of SUVs with three new models in Brazil. In China, the company's joint venture Dongfeng Renault has started production of the Kadjar compact SUV at its Wuhan Plant.

Renault-Nissan Alliance unveils strategy for autonomous driving and connectivity

The Renault-Nissan Alliance achieved synergies worth EUR 4.3 billion in 2015, meeting the 2016 target one year ahead of schedule. The introduction of the Alliance's Common Module Family (CMF) vehicles as well as convergence of purchasing, development, and production functions accelerated these efforts. The Alliance also unveiled launch plans for the autonomous driving and connectivity technologies.

Business results for H1 2016 and outlook for 2016

Renault Group posted record sales of 1.57 million units for the first half of 2016. The Group's revenue for the period increased by 13.5% year-over-year (y/y) to EUR 25.2 billion and operating profit grew 40.6% to EUR 1.54 billion with an operating margin of 6.1%. According to Renault Group's outlook released in July 2016, its revenue and operating margin for 2016 are expected to improve from the previous year (EUR 45.3 billion and 5.1%).

This report is for paid members only. Remaining 9 chapters remaining.
Free membership registration allows you to read the rest of the article for a limited time.

Click here for a free trial.