Renault cuts global sales forecast

It cites Japanese quake, competition as key reasons

PARIS: Renault pared its forecast for a rise in the global auto market this year after disruption from the Japanese earthquake and said Europe, a key market for the French carmaker, will lag the rest of the world.

Renault yesterday reported a 1.9% rise in its own first-half vehicle sales, boosted by international growth.

Carmakers are chasing sales growth in booming markets such as Brazil and India as sales stagnate in mature regions like Europe, and economic uncertainty and austerity measures threaten consumer spending and future growth.

Renault, whose partner is Japan's Nissan Motor yesterday predicted a 3%-4% rise in worldwide sales volumes in 2011. Europe would lag the global trend with a 0%-2% fall, it said.

In January, Renault had forecast a rise in the global market of more than 4%, before the earthquake in March that devastated Japanese automotive parts suppliers and had knock-on effects for the global automotive industry.

Renault shares were down 1.3% at 38.695 euros by 0821 GMTyesterday, broadly in line with a lower Stoxx 600 European auto index .

Renault kept its forecast for Europe and said it now saw a 4%-6% fall in its home market of France, compared with a previous prediction of an 8%-10% drop.

The carmaker said the share of group vehicles sold outside Europe grew by 6 percentage points to 40%, helped by Brazil and Russia, while group sales outside Europe rose by 20.4% to 542,411 vehicles in the first half.

Commercial director Jerome Stoll told a news conference that Renault group vehicle sales would rise this year compared with 2010 and rise again in 2012 compared with this year.

The group is targeting sales of more than 3 million vehicles in 2013 as part of a long-term strategic plan it unveiled in February.

Renault said the supply difficulties that have affected its own sales in recent months, which were not related to the Japanese disaster but to problems with suppliers ramping up capacity after the financial crisis, should start to ease from July.

“The group's production sites will return to a high level of activity from end-August and our delivery times will become shorter,” it said in a statement.

Renault, whose group brands also include Renault Samsung Motors and low-cost brand Dacia, said first-half car and light commercial vehicle sales rose to 1.374 million, driven by a strong increase in sales outside Europe. Reuters