Renault Sees Europe’s Auto Sales Off in 2012
Renault SA Chief Executive Carlos Ghosn on Tuesday painted a gloomy outlook for car makers in Europe this year. Automobile sales in the region could decline between 2% and 3%, while France, Renault’s home market, faces a between 5% and 6% drop in sales, Mr. Ghosn said.
«It’s going to be tough for everyone, not just for Renault,» Mr. Ghosn said in an interview on the France Inter radio station.
«What really worries us is France, as we’re very sensitive to the French market, and we expect the French market to contract by between 5% and 6%,» said Mr. Ghosn, who is also CEO of Renault partner Nissan Motor Co.
However, he pointed out that sales gains in markets outside Europe should compensate.
Renault reported a 5,7% drop last year in sales of cars and vans in Europe that was offset by a 19% increase in non-European sales. The auto maker’s world-wide sales volume rose 3,6% to a record 2,7 million vehicles last year.
Renault has set in place a cost-control regime to reduce overhead at a time when margins are under pressure because of a price war in the market for smaller vehicles in Europe.
«We are very prudent as regards inventories and investments» for the coming months, Mr. Ghosn said.
But there will be no cutting back on longer-term investments. «I think we’ll get through [the economic slowdown] OK, and that little by little measures will be taken to lift all the uncertainty in financial markets,» he said.
Commenting on a call by French presidential hopeful Francois Hollande to reform the practice of awarding stock options to top executives, Mr. Ghosn said this form of remuneration has probably run its course and no longer projects the image that companies would like. There will probably be a shift toward other forms of more transparent methods, including performance bonuses, he said.
Asked about the company’s electric vehicle strategy, Mr. Ghosn said that although the market is presently in its infancy, production costs are falling and technology is evolving. He said Renault is selling all the electric cars it can produce, but added that any production bottlenecks are chiefly due to the lack of batteries.
«We’re not making enough batteries,» he said. The Renault-Nissan alliance plans to have several battery plants to supply its electric vehicle production sites, in Japan, France, the U.K. and the U.S.
He said Renault’s assembly plant at Douai in northern France will be the focus for a push into the higher-priced end of the car market, where Renault has struggled against German rivals in recent years.
Mr. Ghosn said the plant will produce three models in this market segment: replacements for the Vel Satis and Laguna sedans, and for the Espace people carrier as well as a new car based on a platform made by Daimler AG’s Mercedes-Benz division under a partnership the auto makers set up in 2010.
Mr. Ghosn said that for now Renault hasn’t felt any pressure from the Turkish authorities after French lawmakers made it a crime to deny that massacres of Armenians in 1915 in Turkey was genocide. Renault has an important vehicle assembly operation in Turkey.
