Renault’s First-Half Deliveries Rise on Demand for Dacia
Deliveries advanced to 1.37 million cars and light commercial vehicles from 1.3 million a year earlier, the Boulogne-Billancourt, France-based company said today in a statement. Renault increased its forecast for 2014 growth in industry wide European car sales to a range of 3% to 4% from an earlier prediction of 2% to 3%.
Renault, which owns 43% of Japanese carmaker Nissan Motor Co., is pushing into emerging markets to reduce dependence on Europe, where demand is gradually recovering from a two- decade low. The company’s home region propelled sales growth in the first six months of the year, with gains exceeding 35% in countries such as Spain and the U.K., while deliveries outside Europe dropped 9% because of declines in Russia, Argentina and Algeria.
“The first half was clearly a huge surprise in terms of the performance they've shown in western Europe and the Dacia brand,” said Arndt Ellinghorst, an automotive analyst at ISI Group in London.
Renault jumped as much as 3.4% to 72.95 euros, the highest intraday price since April 25, and was trading up 2.7% at 11:45 a.m. in Paris. The stock has climbed 24% this year, valuing the company at 21.4 billion euros ($29.1 billion).
‘Positive Momentum’
Sales of Dacia models and the Renault Captur compact sport- utility vehicle enabled the French company “to diminish the impact of the decline in our main emerging markets and to maintain the group’s positive momentum,” Chief Performance Officer Jerome Stoll said in the statement.
Renault stuck to full-year targets of an increased market share in Europe and higher auto sales globally.
Demand for Dacia’s two best-selling cars in Europe, the revamped Duster SUV and the Sandero hatchback, fueled a 24% jump in the brand’s first-half sales in the region. The no-frills nameplate helped Renault’s European sales climb 18% in the period.
Deliveries in Russia, Renault’s third-biggest market, fell 8%. The company and Nissan are betting on the future of Russia’s car market by taking control of OAO AvtoVAZ, the maker of Lada models and the country’s largest auto producer.
Renault is predicting a further industrywide car-sales drop in emerging markets for the second half, prompting the company to push for price stability in its home region. The automaker’s first-half pricing on the continent was “higher than its main competitors,” Stoll said in an online chat with reporters.
Russia’s car market will shrink by about 10% this year, with Brazil’s dropping about 5% and Argentina’s plunging about 20%, Stoll said. The company’s entry-level range, sold as Dacia products in Europe and under the Renault badge in other markets, represented 42% of group first- half sales compared with 41% a year earlier, he said.
-Bloomberg