Renault sales focus on Nissan tie-up
French carmaker, Renault, posted record sales and profit for 2017, bolstering chief executive, Carlos Ghosn’s position, in the face of French government demands for a clearer succession plan and deeper integration with alliance partner, Nissan.
Renault owns 43.4% of its Japanese partner, which, in turn, controls Mitsubishi Motors, via a 34% stake.
Renault-Nissan also owns the AvtoVAZ business — the maker of Lada cars — in Russia.
Renault’s shares rose 2.5% in the latest session, for a 3.5% gain in the past year, after it unveiled a 17% surge in operating profit, to over €3.85bn, on revenues of €58.77bn, which rose 14.7% on buoyant European demand.
Operating profit at the core automotive division, excluding the recently consolidated business in Russia, rose over 15%, to €363m.
The strong financial performance may help Mr Ghosn resist pressure from the French government, Renault’s biggest shareholder, for a closer tie-up with Nissan that also serves national interests.
The French state owns 15% of Renault and has two board seats. But Brazilian-born Mr Ghosn made clear Renault and Nissan are in no rush to merge, especially not on French terms.
“I don’t see how the Japanese side is going to accept further steps with the French state as a major shareholder,” he told analysts.
France’s president, Emmanuel Macron, said he was seeking a “clear roadmap, safeguarding the interests of the company, the alliance, and all of the French industrial sites”.
Shareholders, led by the French state, voted against Mr Ghosn’s pay in 2016, but narrowly approved it last year.
The package, to be submitted in June, includes €2.46m in fixed and variable pay, plus up to 80,000 long-term performance shares, currently worth €8.6m.
Net income rose 49.6%, to over €5.11bn, helped by a €2.79bn contribution from Nissan.
Renault’s 2017 global vehicle deliveries rose 8.5%, the company disclosed last month, with about one-third of the growth coming from Europe — helped by its new, Koleos, mid-sized SUV and recently revamped Megane family of compact cars.
Christian Stadler, a professor and car industry expert at Warwick Business School, said that while booming European sales had helped, Renault had also “made some smart acquisitions”, such as buying Lada.
“Renault is strong in Europe and this market is performing particularly well, at the moment, while Renault has made some smart acquisitions,” he said.
