Renault Losing Steam in the EU
It should come as no surprise to most that Renault’s number have been “off” in the EU. Many have argued that earlier success by Carlos Ghosn was due to lucky timing. At his arrival, Renault was in the midst of a product renaissance of sorts. The result of the company-wide product refresh was impressive sales, which included large profits. Fast forward to 2007 and the honeymoon is all but over for Ghosn.
Renault announced today that EU sales for March 2007 dropped 5.6% from March 2006. Sales for the Renault brand worldwide dropped 7.2%. Despite this, Renault still continues to have its largest market penetration in two EU countries, Romania and France.
While Renault struggled in the EU, the results were not so disappointing worldwide. In fact marketing and sales executives should be pleased that Renault has performed best in non-EU countries. On a Russian market that rose 11.5%, Renault confirmed its remarkable sales growth with a 63.2% increase thanks to the success of the Logan and the entire product line. Renault reported record sales in Algeria in the first quarter, up 29%. Renault continued to advance in the Americas, with sales rising by 10.6%. Sales were up 20% in Brazil and 75.1% in Venezuela. The biggest growth in the first quarter came from Argentina (+50.2%) and Venezuela (+87.8%).
The overall result may be disappointing to some at Renault but it is good news that European manufacturers can thrive outside of the EU. While the USA has long been a key market for the Germans, the French have long been outsiders in the USA, and show no signs of returning. Of course, Renault can always rely on Nissan if they need help across the pond. We would expect sales to be strong for the next months due to the latest product announcements, but Renault will have to improve in the EU, its core market, if it expects the year to go well.
Sources: Renault
