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Renault First-Half Deliveries Fall 1.9 Percent on European Decline

Friday, 12 July 2013 07:40 AM

Renault SA, France’s second-biggest carmaker, said first-half vehicle sales fell 1.9 percent as a sixth annual contraction in Europe’s car market more than offset increases abroad.

Deliveries dropped to 1.3 million cars and light commercial vehicles from 1.33 million a year earlier, the Boulogne-Billancourt, France-based company said today in a statement. Renault stuck to a forecast of a 5 percent decline in industrywide European car sales in 2013 while lowering its prediction for world auto-market growth to 2 percent from an estimated 3 percent gain.

The economic climate in Europe “remains tense,” Volkswagen AG, the region’s biggest carmaker, said today as it reported global first-half sales growth of 5.5 percent. Renault is pushing sales in Russia, North Africa and South America to reduce reliance on Europe, where demand for mass-market cars is set to fall to a two-decade low. The company reiterated today that its worldwide deliveries will rise in 2013.

“These are good results,” said Florent Couvreur, an analyst at CM-CIC Securities with an accumulate recommendation on Renault stock. “These sales show they have a strong geographical mix, as they managed to increase their global sales in the second quarter, despite the slumping European market,”

Dacia Growth

First-half sales dropped 4.6 percent to 1.06 million vehicles at the main Renault brand. Deliveries of budget Dacia models jumped 17 percent to 211,438. Sales at the Renault Samsung Motors division slumped 12 percent to 29,136 units.

European sales fell 7.3 percent to 656,580 vehicles, Renault said. Deliveries outside Europe, which rose 4.3 percent, accounted for 50 percent of the global total compared with 47 percent a year earlier.

That compares with Wolfsburg, Germany-based Volkswagen’s first-half group sales increase to 4.7 million cars, sport-utility vehicles and commercial vans that included gains of 4.4 percent at the main VW nameplate and 6.4 percent at the luxury Audi marque. Volkswagen is also including the Porsche sports-car brand’s figures in the period for the first time.

Renault was trading up 1.2 percent at 56.70 euros at 1:10 p.m. in Paris, paring back from a gain of as much as 1.9 percent earlier today, before the sales figures were published. Volkswagen rose as much as 1.4 percent to 167.55 euros and was 1 percent higher in Frankfurt.

New Models

The French company is updating its model line in an effort to attract customers. Vehicles introduced in the last year include Renault’s first compact crossover, the Captur; the Dacia Duster compact SUV; and new versions of the Renault Clio and Dacia Sandero hatchbacks and Dacia Logan sedan and wagon.

Entry-level models accounted for 40 percent of Renault’s group deliveries in the first half, and that range of vehicles gives the company a “global advantage,” Jerome Stoll, head of group sales, told journalists today on a conference call. Dacia has reached a target market share in Europe of 2 percent, and the division will continue to post sales gains, he said.

The company is sticking to a global sales-increase forecast even with auto-market slowdowns in Russia and India, which haven’t affected the carmaker’s deliveries so far, Stoll said. Renault is still awaiting final regulatory approval in China, the world’s biggest auto market, to form a joint venture for assembling vehicles in the country with Dongfeng Motor Group Co.

Russian Increase

Sales in Russia, where Renault cooperates with Lada maker OAO AvtoVAZ, jumped 9.5 percent to 104,633 units, said Francois Rouget, a spokesman for the French company. Russia has overtaken Brazil as the carmaker’s second-biggest national market, with France ranking first.

Renault Chief Executive Officer Carlos Ghosn, who is also head of Japanese partner automaker Nissan Motor Co., predicted on July 6 that the European car market will probably shrink further in 2014 and 2015 as rising unemployment continues to sap consumer demand, and that he sees no “trigger” to revive the economy.

The company’s prediction for the European car market’s decline this year matches the estimate reiterated on July 8 by Paris-based competitor PSA Peugeot Citroen, the region’s second-biggest automaker. Peugeot said about one in five of the vehicles it sells is in the premium segment, as it pushes up-market models to make up for declines in Europe.

Ford Motor Co., the second-biggest U.S. automaker, said yesterday that it doesn’t plan to widen production-capacity cuts in Europe amid signs the market is beginning to stabilize. Dearborn, Michigan-based Ford’s first-half deliveries in its main 19 European markets fell 8.3 percent, with the drop narrowed by a 6.4 percent increase in June.

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Renault SA, France's second-biggest carmaker, said first-half vehicle sales fell 1.9 percent as a sixth annual contraction in Europe's car market more than offset increases abroad.
Friday, 12 July 2013 07:40 AM
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