Ghosn set to unveil Renault roadmap Thursday

7th February 2006, Comments 0 comments

PARIS, Feb 7, 2006 (AFP) - Carlos Ghosn, who is credited with saving Nissan from bankruptcy, is set on Thursday to unveil his long-awaited plan to steer stagnating French car maker Renault over the rough terrain of the global auto market.

PARIS, Feb 7, 2006 (AFP) - Carlos Ghosn, who is credited with saving Nissan from bankruptcy, is set on Thursday to unveil his long-awaited plan to steer stagnating French car maker Renault over the rough terrain of the global auto market.

Ghosn, a fast-talking polyglot born in Brazil to parents of Lebanese origin, will reveal his three-year plan for 2006-2009 at the car maker's headquarters near Paris. His strategy has so far been kept a closely guarded secret.

When he became Renault chief executive less than a year ago with a string of turnaround successes behind him, he gave himself six months to re-acquaint himself with the inner workings of Renault before delivering his diagnosis.

"I have the habit of working from a blank sheet, to observe without pre-conceived ideas and to listen to the players in all the sectors and at every level," he told Le Monde in March.

He does not have to rescue Renault, as he did for Nissan, but he has to help the 107-year-old French auto maker shake itself up to meet the challenges of the 21st century.

After two flush years thanks largely to the success of the Megane, Renault's top-selling model in western Europe, Renault last year saw sales drop in the mature and highly competitive European market.

It lost its place as the continent's top car maker to Volkswagen of Germany, due largely to the ageing of the Megane model and disappointing sales of the compact Modus, which have not yet been offset by sales of the new Clio III.

Few details have emerged of what Ghosn, who was educated in France, may be planning for the auto maker, but analysts say he may announce a series of new models along with cost-cutting measures and a re-organisation of the company structure.

He had already restructured tyre maker Michelin before his crowning success to date: the transformation of a nearly dead Nissan in 1999 to the world's most profitable car manufacturer in 2003.

When he was brought in by Renault to save Nissan, the Japanese automaker was in rapid decline, with billions of dollars of debt and plunging market share. Today, Nissan is the number two Japanese carmaker, after Toyota, measured by market capitalization.

And it is twice as big as Renault measured by sales. In the globe-spanning partnership, Renault owns 44.4 percent of Nissan, which in turn holds 15 percent of Renault. They have a combined 300,000 employees.

Ghosn, who has made a reputation in slashing costs, arrived back in France with the reputation of "cost killer".

He has returned to Europe at a time when high prices of commodities have pressured the car-making industry worldwide, and spluttering economic growth in Europe has dulled consumers' appetite for new cars.

He could choose to address a number of challenges, including returning Renault to the United States with the support of Nissan, which already has a strong foothold in the world's biggest automobile market.

Conquering the coveted Chinese market and internationalizing the company's operations are other possible tasks.

Renault posted record profit in 2004 of more than EUR 3.5 billion euros, partly due to the contribution from Nissan. But its worldwide sales were stagnating. Between 1998 and 2004, they rose only 100,000 units to 2.3 million cars and utility vehicles.

Ghosn is set to announce that he will focus on boosting sales, which reached 2.5 million vehicles in 2005, and improving profitability. Ghosn's predecessor, Louis Schweitzer, had set a sales target of four million a year by 2010.

He may also announce enlarging the range, with more models to target new segments such as the lucrative sports utility vehicles (SUVs). He might also announce plans to expand sales of the Logan internationally, the no-frills car now assembled in various emerging countries.

Cost-cutting measures, such as Renault abandoning Formula One racing, may also be announced.

Ghosn has warned however that he will not introduce any new model in 2006.

He has also said that due to lack of profitability, the launch of a second generation of the popular compact Twingo, which will be made in Slovenia, will be delayed by a year.

Copyright AFP

Subject: French news

 

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