Renault is doing better than we here at DCB would have predicted, operating profits are up by a whopping 41 percent. Now we’re no Renault fanboys but even to us that’s an impressive return. The up-swing in fortunes was partly due to the introduction of a refreshed product offering which saw Renault accumulate 1.7 billion euros in profit.
Renault has been busy of late updating it’s entire product portfolio and that means net income has risen 8.8 percent, operating margins increased from 4.9 percent to 6.1 percent.
Under current CEO, Carlos Ghosn, the auto maker is on target increase revenue and operating margins through a regional diversification product strategy.
Renault will introduce 10 revamped and new models before the end of the year on the back of booming European demand where Renault sells 60 percent of it’s production output.
Outside of Renault’s European buffer zone things are a little more tense. The all important America’s territory is predicted to slowdown.
Renault has negative equity in the USA and relies on it’s Nissan alliance to piggyback off the share of profits.
Renault has no presence in the USA and when it did in the 1980’s it never particularly sold well but they do sell into the South American market.
Other sales territories such as Algeria has placed import restrictions and Russia is experiencing yet another recession.
Renault is expecting to take a controlling stake in AvtoVaz, Russia’s biggest auto manufacturer.
AvtoVaz is a loss making entity and will require significant investment from Renault to realign and modernise much of the production facilities. This will inevitably impact on future profits.
Renault is also expecting to splash the cash on R&D in an effort to meet new engine and emissions standards.