Saturday, February 13, 2016

When Renault formalizes its past promises – Les Echos

As an air of revenge? Gradually, Renault begins to realize some pledges for years. Symbol flagship, unveiled its annual results presented Friday the goal of 5% operating margin, announced last decade (strategic plans “Contract 2009″ in 2006 and “Drive The Change” in 2011), swept by the financial crises and European, and finally completed in 2015 (5.1%), two years ahead of the new target set by the CEO of french automaker Carlos Ghosn.

Friday, the manufacturer has in fact given serious pledges to its stakeholders. Not only to its largest shareholder, the French state, which will be assigned a solid dividend – 2.4 euros – after a 2015 years marked by a serious crisis of confidence between the Franco-Japanese alliance and Bercy. Not only not to its unions, via the announcement of 1,000 new hires in France, which will fulfill the goal of producing 710,000 cars in the hexagon in 2016, without erasing the 8200 departures committed in 2013.

More broadly, Renault seems to pass a course. Reduced debt – 2.6 billion of liquidity for the automotive division – it delivers the best operating results in its history (44.2% to 2.3 billion euros), allowing it to offer a coupon that is not only derived from Nissan as was the case for years.

This strength, Renault will first look for it in its strategy of alliances (Nissan, Daimler), which, again, after years of promises, materializes in the accounts . Last year, purchases made jointly with the Japanese ally – and to a lesser extent with Daimler – have improved the operating result of 492 million euros. This is the direct result of the convergence of political commitment with Nissan in 2014 – common platforms, convergence of engineering and plants – which materialized in 2015 with a series of new models (Space, Talisman, Qajar, Kwid. ..) .Renault also benefits from its alliances to load its plants. Whether with Nissan in India, Korea Southern or France (the Micra will be produced in 2016 at the Flins plant) – or with Daimler (production Citan and Smart in the Renault factories, engine deliveries and gearboxes), these contracts generated € 5.3 billion in sales in 2015 alone, 11.7% of Renault sales!

A bunch of new

The constructor to the diamond also benefits from its product plan. After 2015, the group continues its offensive in 2016 (Megane, Scenic, Alpine, cross-over segment D, pick-up with Daimler …). Never has launched many new products in a short time. Again, the group responds to past criticism by renewing the Renault range, Dacia more contributor to the result, and finally clearing the Chinese market with the opening of its first factory.

All is not rosy. With a margin of 3.5% for its automotive division alone, the manufacturer finally short of PSA (5% in the first half), which compensates for its lack of major alliance by its presence in China. More broadly, Renault must still remove various unknowns. If Ghosn still rejected any accusation of cheating on the emissions of its diesel engines, the group remains within the scope of an investigation of Fraud (DGCCRF). Another question, internationally, as the group focuses the bulk of its profits on the rebound of the European market, but Russia declined (see cons below) and South America. Some will see a new feature with a more robust model, Renault seems indeed able to absorb large shocks without slowing profitability

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