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Customer LoginsRenault Group's global sales grow 7.3% y/y during Q1
Renault Group has released data showing a buoyant first quarter as its global light-vehicle sales have grown by 7.3% y/y.
IHS Automotive Perspective
- Significance: Renault Group's global light vehicle sales have grown by 7.3% y/y during the first quarter of 2016.
- Implications: The French OEM has had a positive start to 2016. While it has been helped by a low base of comparison and some seasonal factors such as the extra day in February due to the leap year, it is also capitalising on the strategy that it has been following in recent times.
- Outlook: IHS Automotive currently expects that the Renault Group's sales (excluding AvtoVAZ) are likely to improve by 6.5% y/y during 2016 to 2.92 million, while its global sales will reach almost 3.6 million units during 2020, and over 4.1 million units including AvtoVAZ.
Renault Group has reported buoyant first quarter light-vehicle sales. According to data released by the company, global demand has increased by 7.3% year on year (y/y) to 692,453 units. This has been supported by a 10.2% y/y gain during March to 296,130 units. During the quarter, sales of passenger cars have grown by 6.6% y/y to 591,738 units, and light commercial vehicles (LCV) have gained by 11.5% y/y to 94,351 units.
From a brand perspective, Renault has performed strongly during the first three months of 2016, up 10.7% y/y to 544,073 units. New introductions have been key to its performance, with models like the fifth-generation Renault Espace, Kadjar crossover, D-segment Talisman and the A-segment Kwid - which is sold mainly in India at present - all playing an important part. Although the fourth-generation Mégane is starting to reach customers, in many markets it is still going through a transitional phase from the old model and therefore has yet to contribute positively. The brand's performance has also been underpinned by popular models in its existing range, most notably the Captur and the Renault-badged variant of the Logan. In addition, its electric-only Zoe had an important boost in the first quarter thanks to a particularly strong March. The low-cost Dacia brand has fallen back in the first quarter of 3.9% y/y to 131,781 units, as while its Sandero, Dokker and Lodgy all made positive progress, it was dragged back by the Duster and particularly the Logan. Its South Korean brand Renault Samsung has also fallen 2.1% y/y to 16,599 units during this period. However, a surge in March of 70.4% y/y to 10,235 units thanks to the launch of the Talisman-based SM6 has gone some way to close an earlier, more significant deficit.
On a regional basis, sales have ebbed and flowed during the first quarter. The European market has remained the bedrock of this recent growth, helped by the number of new introductions that it has made there and the more buoyant market. European sales during the first quarter have risen 8.9% y/y to 433,861 units. This has been underpinned by an 8.6% y/y increase in its domestic market France, where it sold 163,104 units. However, significant improvements during this time have come from Italy, the UK, Ireland, Portugal, Sweden, Denmark and Poland which all recorded double-digit percentage gains. This was offset by a weakening in Spain and a slump in Benelux led by Netherlands, due to changes in a tax situation at the beginning of the year.
There was a far larger gain in Africa, Middle East and India, where sales have jumped by 36.1 % y/y during the first quarter to 94,955 units. Of key importance to this improvement has been the introduction of the A-segment Kwid to the Indian market which has helped Renault's sales almost treble during the quarter from 10,122 units to 29,289 units. In addition, the resumption of sales in Iran has been of huge benefit, with sales having increased from 2,130 units to 14,540 units. Other important contributors have been Morocco, where sales have grown by almost one-fifth. However, it has struggled in Algeria where its sales have almost halved y/y.
Other regions have been weaker, but it is not all gloom. Indeed, while Eurasia sales fell 2.0% y/y to 67,198 units during the quarter, not helped by a 15.1% y/y decline in Russia to 23,285 units, this has been partly offset by its performance in Turkey. The situation is more buoyant for this region when looking at the situation during March where Eurasia has risen 4.6% y/y to 30,263 units, as its decline in Russia was just 0.6% y/y, suggesting that the situation in its automotive market might be flattening. Another region where the clouds of the quarter are shadowing an improvement in March has been Asia-Pacific. While sales are down by 11.5% y/y during the first quarter of 2016 to 24,881 units, sales in the month have rebounded by 18.7% y/y to 13,562 unit. The data show that while China remains an area of weakness as it awaits the market entry of its locally built Kadjar, the South Korean market has turned around this month on the back of the Renault Samsung SM6 launch.
However, there is less to be positive about in the Americas region where sales have fallen by 11.1% y/y to 71,558 units, as the tally for March has contracted 7.6% y/y. Again, the region which is predominantly made up of markets in South America, has been undermined by Brazil where its registrations have contracted by more than 25% during the quarter and the month. This is partly offset by Argentina, Mexico and Chile.
Outlook and implications
Renault has had a positive start to 2016. While it has been helped by a low base of comparison and some seasonal factors such as the extra day in February due to the leap year, it is also capitalising on the strategy that it has been following in recent times. The model launch offensive that it has been undertaking in Europe - particularly in the booming crossover market - has been particularly effective as it has coincided with the improvements in markets that are continuing to undergo a resurgence as consumer confidence builds and the age of the vehicle parc has led to the need for replacement.
Despite the improvement recorded in March, Renault's share of sales outside Europe has still slipped y/y from 38.3% to 37.3%. Situations that have been a factor here remain Brazil and Russia, although Renault outperformed the Russian market as a whole. Here, it could benefit from the introduction of the new Renault Kaptur, which was revealed last month. However, with its Russian operations also comprising AvtoVAZ (not currently included in this data) which is suffering its own strife at the moment, Renault will be looking for any sort of headway here.
There is some respite from this in its other International markets though. The Africa - Middle East - India market continued to improve in 2015 and this momentum seems set to continue in 2016 as it fulfills orders for the Renault Kwid, which is said to have received over 100,000 orders since its launch before reaching out to export markets. It is also looking to gain further benefits from leveraging this platform on other models in future. Furthermore, the lifting of economic sanctions in Iran has set in motion an increase in sales, and further opportunities for growth are becoming apparent. In addition, its Asia-Pacific region will be boosted by the introduction of the Kadjar in China as its first locally built model with its partner Dongfeng. This will tap into the highly popular crossover market in the country, and will be followed by further models in due course.
IHS Automotive currently expects that the Renault Group's sales (excluding AvtoVAZ) are likely to improve by 6.5% y/y during 2016 to 2.92 million, while its global sales will reach almost 3.6 million units during 2020, and over 4.1 million units including AvtoVAZ.
About this article
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.