Renault Issues Positive 2019 Sales Growth Outlook

Renault Issues Positive 2019 Sales Growth Outlook
January 21, 2019


The stock of Renault SA (RENA.PA) gained 1.73% on Friday to close at €57.10 after reporting a 3% y-o-y increase in vehicle sales in 2018, mainly due to the integration of Huasong and Jinbei, both of which are Chinese brands. Renault said it anticipates another year of sales growth this year, despite the unexpected expulsion of Chairman and Chief Executive Carlos Ghosn and slight discomfort with alliance partner Nissan (7201.T).


Nissan posts impressive sales figures

The French automaker reported global sales of 3.90 million vehicles, including nearly 166,000 sold by its Chinese partner Brilliance. The figures are impressive considering the trade tensions between the US and China, the implementation of new engine emission standards in Europe, and the growing popularity of other means of transport. Excluding the sales realized through the partnership, global sales declined with 1.2%. The namesake (Renault) brand recorded sales of 2.50 million vehicles, a decline of 5.2% on a y-o-y basis. However, the sales of Lada Marque increased with 19% to 398,282 vehicles. Renault outsold PSA Group, which owns the Peugeot brand, by a narrow margin of 6,530 vehicles.

Looking forward, Renault hopes to record a small increase in sales this year, with a noticeable increase in momentum in the second half, mainly due to the planned introduction of a number of new models, including an overhauled version of its popular Clio car. In March, Renault plans to unveil the fifth-generation Clio at the Geneva auto show.

Renault predicts the global automobile market to be largely stable, with Russia and Brazil registering a growth of 3% and 10%, respectively.

Renault brand’s volume fell by 5.2% to 2.53 million light-commercial vehicles (including cars). Splitting the report further, car sales declined by 6.2%, while LCV sales increased by 0.3%.

While Dacia, a budget vehicle, recorded 7% increase in sales to 700,798 vehicles, Russian brand Lada’s sales grew 19% to 398,282 vehicles. Notably, Renault’s sales mix increased to 51% outside Europe in 2018, compared with 49% in the previous year. Furthermore, sales surged 6.1% in global regions.

Sales in Europe grew with only by 0.5%, after recording massive growth in 2016 and 2017 from a refurbished lineup of cars. In the fourth quarter, however, Renault’s market share in the passenger car market decreased to 9.8%, from 10.9% in the year-ago period.

In Russia, Renault’s second largest market, sales rose by 11%. Notably, the Russian market as a whole grew by 13% in 2018. Renault is planning to launch Arkana fastback crossover in 2019.

Sales declined by 16% in the Africa-Middle East-India region. In particular, Renault sales slumped 27% in India as the success with the Kwid SUV paled. However, the introduction of Kwid boosted sales in Brazil by 29%, increasing the overall Latin American sales by 12%.

Renault also turned out to become a dominant player in the electric vehicle market in Europe, with a 22% gain in market share. The company also recorded a 37% increase in global sales on y-o-y basis.

Renault sales Chief, Olivier Murguet, told the following to reporters: “Volumes progressed across almost all our regions (in 2018), and we’re entering 2019 with expectations for a slight increase in sales.”

He is also quoted as having said the following: “Sales growth in Russia, Brazil, and Africa offset almost all of the economic and geopolitical headwinds outside Europe.”

Murguet refrained from giving his opinion on the leadership dilemma that surrounds Renault-Nissan following the arrest of Chairman Carlos Ghosn in Japan for alleged financial mismanagement. Ghosn was charged with allegations that he deliberately refrained from reporting an extra compensation of nearly $80 million in 2010-18 that he had organized to be credited later.

Two months after the arrest, on Thursday the 17th of January, upon pressure from the French government, Chairman Philippe Lagayette mentioned that the company would appoint a new CEO soon. The positive outlook is expected to keep the stock of Renault strong in the week ahead.

Technically, the stock is rising after testing the support level of 57. The next resistance is expected only at 75 levels. The MACD indicator is also advancing towards the positive region. As a result, we can expect the stock to move up in the short-term.

rna - technical analysis - 21st January 2019

Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.

Richard W

Richard W

Richard is the guy who know everything there is about the financial industry, working in a top firm for over 15 years, he will give the lowdown on some of the biggest companies in the world

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