J. Cole - False Prophets
Renault's share price of France was on the slide this year, not surprising for the largest investor in the Russian automotive industry, but investors are always impressed by the long-term prospects of the company as it reduces unceasingly costs, unveils new cars and most impressive bank profits in the low-cost Dacia brand.
Renault, 14 percent owned by the French state, is the third largest car company in Western Europe measured by sales with just over nine percent of VW Germany is leading with around 25 percent, and Peugeot-Citroen of France also second Peugeot-Citroen owned 14 percent by the State Ford Europe and GM Europe are right behind.
According profits Moody Investors Service, Renault will increase over the next 18 months, the new small city car Clio and Captur small SUV is selling well, helped by Dacias like brand vehicles cheap Sandero and Dacia Duster are widely done in the third world countries using outdated components Renaults new space in early 2015, a new compact SUV in mid-year, Laguna and Mégane in late 2015 and Scenic in 2016 will at least continue the momentum .
During the first half of 2014 Renault has improved earnings before interest and taxes EBIT to 729 million 903 million 583 million 722 million in the same period of 2013 French companies account profits every six months, and not all three Renault month recorded an increase of 7 percent in revenue in the third quarter to 8 53 billion to € 10 6 billion.
First margin Renault half rose 9 percent to 1, up 1 1 percent in the same period of 2013, Moody's said this was lower than its global competitors like Ford.
In the first 10 months Dacia Renault increased sales in Western Europe 14 3 percent to 951,400 compared to the same period of 2013, and increased market share to 9 3 percent 8 5 percent Dacia accounted for 255.900 sales in the nine months and increased its sales 27 June percent.
Moody's believes that there are good prospects for increased profitability even with 12 to 18 months that would limit the margin gap with global rivals Renault, Moody's in a statement.
Moody's believes four great advantages of Renault are.
The increase of the incremental volume helped by a rejuvenated model and growing, albeit slowly, the European markets.
Higher margins anticipated future product launches.
Additional cooperation with Nissan of Japan and Mercedes is expected to generate production synergies.
Other cost reductions, planned, particularly in the context of the competitive plan in France of society.
No mention of 5 billion € 6 2 billion electric car expenditure program that is slow to reap the benefits or problems caused by the faltering economy of Russia.
Barclays Equity Research said problems in Russia had unfairly affected the stock price, which fell by nearly 75 in mid-April to nearly 62 now, even if the market accounted for eight percent of Renaultsales and 23 percent including AvtoVAZ.
While volumes and volatile currencies in Russia and Latin America are clearly a burden, we believe that the strength of the European franchise Renault, Dacia especially growth and put more emphasis on partnerships as in Nissan Alliance and also with rivals such as Daimler is expected to boost earnings growth in the future, Barclays analyst Kristina Church.
Church benefit plans to continue the momentum in 2015.
We expect volume gains to continue in 2015, renewal of rail products and Renault focuses on the increased profitability of new products, we were excited about the new space will unveil at the Paris Expo that the early products refreshments 2015- 16, which also include a new C-Crossover, Laguna, a-input for India, Megane, Scenic etc., the church said.
Not everyone sharing positive thoughts about the progress of Renault and two months Bernstein Research analyst Max Warburton had this to say.
We are not convinced that the French and broader European love affair with Dacia will be sufficient to offset the slowdown in emerging markets and offer much more than mediocre second half 2015 performance.
Going forward, Moody's expects Renault to continue to optimize its cost structure and productivity, mainly through greater integration with Nissan, which should help reduce manufacturing and logistics costs also its upcoming launches new models and continued cooperation with partners, including Daimler also increase capacity utilization in Europe and contribute positively to profits, Moody's said.
The Renault-Nissan alliance is believed to have invested the most in Russia and now controls 74 1 percent of AvtoVAZ, with local partners Renault-Nissan-AvtoVAZ has a market share of nearly 40 percent, and provides new Lada, Renault, Nissan and Datsun models.
French Renault built the advantage of hope, French Renault, profit from 2013.