Critical Year Ahead for Renualt's Volume Target

Renault has called 2008 a "critical" year as it seeks to boost sales volumes by at least 10 percent helped by its recently revamped Laguna and Twingo and nine new models it will introduce


Renault raised its sale of cars and vans in 2007 by 2.2 percent, it said on Friday, becoming the first European carmaker to detail its 2007 sales volumes ahead of French rival PSA which will do so next week.

"This is a critical year, which will be followed by a second critical year in 2009," Renault sales and marketing director Patrick Blain told a news conference.

Europe's fifth-biggest passenger car maker said it aims to sell 800,000 more cars in 2009 than it did in 2005 with a range of new cars and higher sales outside its main western European home base.

"In 2008, if we don't make at least 10 percent (growth), we will have problems with the 800,000 (vehicle sales goal)," Blain said.

Renault raised its sale of cars and vans in 2007 to 2,487,453 units, but remains below its 2005 level of some 2.5 million.

The rise reversed a fall of 4 percent in 2006 and was larger than a 1.5 percent rise achieved in 2005, including Romania's Dacia and South Korea's Renault Samsung Motors brands.

Analysts said Renault's 2007 vehicle sales rise was in line with expectations and its target for this year was consistent with the group's 2009 ambitions.

"The guidance for double-digit growth in 2008 is absolutely consistent. To reach their 2009 sales target, they need 13 percent growth in 2008 and 13 percent n 2009," said analyst Francois Maury at Oddo Securities.

Gaetan Toulemonde, analyst at Deutsche Bank, estimated Renault had to increase its vehicle sales by at least 15 percent to meet its 2009 target.

After the 2007 launch of the Logan Van, New Twingo, New Laguna, the Samsung QM5 and Brazilian-made Sandero, Renault will launch nine new models in 2008.

That includes the passenger car and light commercial vehicle version of the Kangoo, Clio Estate and Grand Modus.

There will also be a coupe version of the Laguna, a pick-up version of the Logan and replacement for the Thalia/Symbol, a sedan version of the Clio made for markets in eastern Europe.

Renault shares were down 6.4 percent at 87.59 euros by 1219 GMT in a DJ Stoxx European autos index down 3.9 percent after the publication of weak U.S. vehicle sales for December.

Nissan, which is 44 percent owned by Renault, posted a 2.4 percent drop in monthly U.S. sales, pushing its shares down more than 9 percent on the Tokyo stock exchange.

Russia Yes, China Maybe, U.S. Not Now

Blain said Nissan could eventually join Renault's recent pact with Russia's number one automaker AvtoVAZ if the Russian partner agrees to it. Renault agreed in early December to take a 25 percent stake in the maker of Lada.

"At the moment it is a Renault deal, not an alliance deal but the production capacity of AvtoVAZ is sufficient to make cars for Nissan, too," Blain said.

Blain told Reuters a decision on whether to enter the Chinese market would be taken in 2008 but any move on the U.S. market would wait years.

Chief Executive Carlos Ghosn has said Renault will one day be in all three main car markets.

"We'll certainly go to China but the question is how we do that, alone or with someone else, on a small or large scale and with which products," Blain said.

Renault showed several television commercials it will use in its 2008 sales drive, including one in which rich and famous people in Beverly Hills prefer a Renault over their limousines and muscle cars.

The company ranks fifth in Europe behind Volkswagen, PSA Peugeot Citroen, General Motors and Ford.