Renault Group has released data showing a gain in its global sales of 14.3% y/y during March, helping it to maintain a double-digit percentage gain during the first quarter.
IHS Markit Perspective:
- Significance: Renault Group has released data showing a gain in its global sales of 14.3% y/y during March.
- Implications: This has helped it to maintain a double-digit percentage gain during the first quarter.
- Outlook: IHS Markit anticipates that, although the rate of growth of the Renault Group will not be as great as during 2016, it should be around 5% y/y in 2017, standing at almost 3.54 million units by the end of the year.
Renault Group has ended the first quarter with another double-digit percentage gain for its global light-vehicle sales performance. According to data released by the automaker, sales of passenger cars and light commercial vehicles (LCV) during March have risen by 14.3% year on year (y/y) to 366,479 units. Of this, passenger cars accounted for 320,913 units, an increase of 14.2% y/y, while LCVs have gained 15.1% y/y to 45,566 units.
This in turn has helped maintain the automaker's performance in the year to date (YTD) with a rate of growth that now stands at 15.8% y/y to 873,678 units.
Back to the monthly data, on a brand basis, Renault is the mainstay of the OEM's overall volumes. During March it sold 268,953 units, a gain of 15.2% y/y. Again, new and recently introduced models have helped this level of growth, including the fourth-generation Mégane and its derivatives; second-generation Koleos, the Kaptur, Talisman, and Oroch pick-up. Furthermore, the Kwid and Kadjar have maintained their strong start on sales, the latter now being helped by production in the Chinese market. The Zoe is also benefiting from the introduction of a longer-range variant. Other models that have put in a positive performance this month despite their age have been the Clio, Kangoo and Renault-branded first-generation Logan and Sandero, built in Iran. The Dacia brand has gained by 14.0% y/y to 60,296 units, as its updated Sandero made up the majority of improvements. The Lada brand – which is now included in the Renault Group's global sales by virtue of its majority stake in AvtoVAZ – has recorded an 11.4% y/y gain to 26,720 units. Although the brand has dropped a number of older vehicles from its line-up, new and updated models like the XRAY, Vesta and Granta. However, unlike the strong performance put in during earlier months, its South Korean Samsung brand has made more modest improvements during March, with sales up by just 2.7% y/y to 10,510 units as the early surge of the SM6 has now slowed after its first full year on sale, although this has been offset by the new QM6 crossover.
On a regional basis, growth has come from all over despite some markets easing after the strength of new models. Its largest region remained Europe, and in March, European sales increased 13.8% y/y to 214,496 units. Its domestic market, France, remained by far its leader worldwide with 75,265 units, although its rate of growth of 8.0% y/y is weaker than that of the region as a whole. As a result, it was left to its other key markets in the region to pick up the rate. This included Germany, Italy, Spain, the Netherlands and Poland, which all saw strong double-digit percentage improvements, albeit in some cases from an exceptionally low base of comparison.
Africa, Middle East and India has been a region of strong growth recently, and this month has been no different with a gain of 15.1% y/y to 42,273 units having been recorded. It has maintained a double-digit growth rate here despite a dip in performance in the Indian market as Kwid sales topped out. This was offset by further growth in Iran, where it continues to benefit from ending of trade sanctions. Furthermore, the automaker recorded a far better month in Algeria and improvements in Morocco.
In the Americas, Renault Group has recorded a gain of 13.7% y/y to 31,680 units as a surging performance in Argentina combined with a modest improvement in Brazil.
In its Eurasia market, sales are up 8.2% y/y to 58,374 units. Its performance in Russia, where it gained by 14.7% y/y, has contributed strongly to this. Furthermore, both Romania and Ukraine offered further gains. The only real dark spot has been its performance in the Turkish market where it declined by 5.5% y/y.
However, the biggest percentage improvement for the OEM this month has been Asia Pacific. Its sales here have jumped by 44.9% y/y to 19,656 units. As its sales in South Korea have largely flattened, this improvement has been supported by production now taking place in China which has helped to lift its sales locally from 1,194 units to 6,434 units.
Outlook and implications
The latest data to be released by the Renault Group further underlines the success of its recent strategy. However, it should be noted that it has been helped partly in some markets by additional working days caused by Easter falling in April this year rather than March during 2016.
Nevertheless, its persistence in Russia through both its own Renault- and now the Lada brands seems to be paying off to some degree. Indeed, there is already some hope that the consecutive years of decline caused by economic and diplomatic issues could be coming to an end and the automaker will be hoping to be at the forefront of any improvement. Furthermore, its return to Iran and localisation in China is further helping matters. The situation in the latter will further improved as the automaker continues to bring new models, its range growing from the Kadjar and Koleos to featuring the Espace, Talisman and eventually, Captur.
After successfully completing its six-year business plan at the end of 2016, we are now waiting for Renault to announce the next phase of the strategy, which could give some indication as to how it intends to expand its footprint outside Europe (which for the first quarter of 2017 now stands at 41.5%). For now, IHS Markit anticipates that although the rate of growth of the Renault Group (including Lada) will not be as great as during 2016, it should be around 5% y/y in 2017 standing at almost 3.54 million units by the end of the year. We also forecast that Renault Group will build on this to hit 4.2 million at the turn of the decade.
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The above article is from IHS Automotive Same-Day Analysis of automotive news, events and trends, and is a deliverable of the World Markets Automotive Service. The service averages thirty stories per day and also provides competitor and country intelligence. Get a free trial.