Renault has posted operating profit of EUR1,242m in 2013, a 59% jump on the previous year.
However, some analysts noted that the figure fell slightly shy of expectations as the company was hit by slower sales in Europe and in its home market last year.
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Nevertheless, Renault Group revenue for the year was EUR40,932m, 0.5% ahead of 2012.
The company said it will increase sales and operating profit in 2014.
The company said it benefited from a rise in registrations and that its performance was “despite a highly negative foreign currency impact”. It also said it was able to post a positive price effect, reflecting its pricing policy aimed at improving the value of the Renault brand and offsetting the weakness of certain foreign currencies.
Renault CEO Carlos Ghosn said in a statement: “The commitment of all Renault employees enabled the group to meet its 2013 objectives in an unfavourable environment. Strengthened by this result, the group can begin the second part of its strategic plan with confidence”.
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By GlobalDataRenault said it expects the European markets to stabilise and cautioned that growth in emerging markets, still driven by China, is “more uncertain in the short term”.
The company said that the renewal of the Renault model line-up is “off to a strong start” and noted that New Clio is number 1 in France and number 3 in Europe, while claiming that Captur is the leading-selling crossover in France and segment leader in Europe.
Renault also said that it is increasing its market share outside Europe. The mix of non-European sales increased from 38% in 2010 to 50% in 2013, it said. Brazil and Russia became respectively the second and third largest markets for the company. Led by Duster, the company’s most-sold vehicle in 2013, the “unique M0 range has been the driving force behind the strong growth in emerging markets”.
2014-2016 action plans
Renault also offered some detail on its 2014-2016 strategic plans to include:
- A “sustained renewal and expansion of the product line-up”. It said there would be an acceleration of the renewal and expansion starting in the autumn of 2014 with the launch of a new Twingo and Trafic van. These will be “followed by the successors of Espace, Megane, Scenic and a new D sedan which will all share the new alliance 3 million CMF C-D platform”. It also said that the group is going to extend its market coverage with a “complete line-up of cross-over vehicles, an A-entry vehicle designed for India and South America as well as new pick-up trucks for emerging markets”.
- International expansion and renewed growth in Europe. The group is aiming at capturing more than 8% market share in Brazil and Russia and 5% in India. China will become a “top priority in the coming years” with the construction of a new plant in Wuhan with an initial capacity of 150,000 units, designed to produce C- and D-segment crossovers. In Europe, Renault is aiming at recapturing second place among the mass-market brands with a “renewed line-up of connected, user-friendly and environmentally responsible vehicles”. At the same time, the company noted, the high-flying Dacia brand will “sustain its undisputed leadership” in its part of the market.
- Improved competitiveness. The Renault group said it will enjoy the benefits of scale and improved competitiveness as a result of sharing alliance platforms and modules (CMF) on which more than 80% of future vehicles will be based. The company plans that standardised modules will account for two thirds of the value of future vehicles, up from one third today. It also said that the localisation of parts and components will increase in order to make better use of the company’s global manufacturing footprint and contain costs. And the company added that it will also benefit from the effects of the competitiveness plans signed in France and Spain as well as manufacturing vehicles for partners. By completion of the plan, Renault said the group will reach a capacity utilisation rate of 100% in Europe (based on 2 shifts/day standard definition).
- Renault-Nissan Alliance synergy benefits to grow. Renault said that an increase in synergies from the Alliance will contribute to improving Renault’s profitability. The convergence projects recently announced in purchasing, engineering, manufacturing and supply chain, and human resources will generate a minimum of EUR4.3bn the end of 2016, the company said.
- Cost containment. The strategy of sharing costs across the Alliance and with partners will allow Renault to sustain a high level of upstream development, while maintaining a ratio of R&D and CAPEX below 9% of group turnover, it is claimed.
By the end of the plan, the Renault group aims to deliver two critical objectives:
- Deliver EUR50bn in consolidated group turnover at the current scope of consolidation. Group turnover includes sales of vehicles and parts, associated services and business with partners.
- Deliver a sustained level of profitability by achieving an operating profit margin of at least 5% of group turnover, while achieving a positive free cash flow each year.
See also: FRANCE: Renault reveals details of future vehicles
