Study of Renault's strategy

Résumé du document

Renault is a famous car-constructor. It was created in 1899 by the brothers Renault and was considered one of France's flourishing industry throughout the XXth century. But now the firm has adapted itself to a new global and more complex environment. This adapting process was no simple "deal": the firm had first to change its status: turn a public "institution" into a private competitive company.
In order to introduce Renault, one can go through its main figures. In 2004 Renault's sales turnover was 40 715 million €. This result is to divide between two main activities: car construction on the one hand (38 645 million €) and sales financing on the other hand (2 070 million €). In terms of geographical repartition of Renault's sales turnover in 2001 39.2% was located in France and 60.8% abroad. In 2004 that same value had changed: 34.7% came from France and 65.3% abroad. This simple ratio is a hint that Renault's activity is quickly evolving towards a more and more global activity. In 2004 the Renault Group, which means Renault constructor, Dacia and Samsung, has produced 2,471,654 units. During the same period the group has sold 2 489 401 units. Renault assumes industrial and commercial activity that is 350 industrial and commercial sites in 40 countries. The automobile section concerns conception, development and sales activity. The sales financing section includes financing and commercial accompaniment through RCI banks which represents about 60 societies and above 5% of the global sales turnover.

Extraits

[...] One command company: Renault Nissan B.V. In order to better coordinate common actions in the world, like purchases, relocations or cooperation in factories, Renault and Nissan have a common company where decisions are taken by a collegial structure of command. Thus, organisational costs are fairly reduced. It is important to notice that both companies are equal here, while they're not in general as long as Renault owns almost half Nissan's shares and has a great power of decision in its board of directors Use of the synergies : quality, cost-killings, production lead- time Cross-manufacturing: cost-killing, but still different. [...]

[...] Of course money matters because Renault has invested a lot since 1999. But innovations and technologies, improvement of Renault's capacities of production are the main targets. In this respect the groups have decided not to merge, even though it would have been a good operation for Renault's finances and shareholders. The Alliance's principles Innovation, cost-effectiveness, balance and the use of difference between the partners, who keep their areas of expertise, are the key aspects of the Alliance's success. Both groups refuse the weakening of their identity and a shift of their image: Renault remains French, Nissan Japanese. [...]

[...] Apart from the advantages already quoted in the production fields, it allows Renault to deliver it's vehicle quicker. In a few years, Renault has become a network firm (firme réseau) Steadying outcomes and profits costs-sharing In many field, like we said already, Renault manages to share the costs with Nissan, especially when it comes to production and R&D fields. Nissan and Volvo : a great rate of return As long as Renault owns 20% of Volvo's shares, the firm earns benefits every years and uses its partner's distribution network. [...]

[...] This last point was made clear with the closing of the Vilvoorde site in The results This deep modification of Renault's conceptions was entirely dedicated to the firm's growth. On the 27th march 1999 Renault took control over 36,8ù of Nissan's capital. C. Ghosn was appointed as head of Nissan. Later in 2002 Renault raised its share of the Asian firm to whereas Nissan gained 15% of Renault. At the same time in 1999 the firm took control over Dacia imposing it to modernise its commercial structures in order to launch the 5000€-car program. [...]

[...] Thanks to this partnership, the cost of manufacturing has decreased of 15% ; since car models are compatible, both brands can take advantage of the other's expertise and existing factories in the world. Renault also plans to use common decks within its group, with Dacia and Samsung Motors. Cross-manufacturing Cross-manufacturing enhances the standardization of logistics as far as the full development of a new model is common. Still, the almost similar vehicles differ by the symbol. For instance, the utility vehicle Renault and Nissan worked out and produce together in Europe is called Master or Interstar. In this respect, Kangoo and Platina are also produced on the same load-deck in Mexico. [...]