The Wall Street Journal (Paris) - Renault SA said Monday that first-half world-wide vehicle sales rose by 1.9% from the same period of 2010, and forecast that supply constraints that caused the car maker to lose some 50,000 sales in Europe should gradually start easing from this month.
The company sold 1.37 million cars and light commercial vehicles in the first half, a new sales record, driven by a 20% surge in sales outside Europe, notably Brazil and Russia.
But Renault's sales have been held back in Europe notably by a shortage of electronic control units for diesel engines that has prevented it making cars that customers had ordered. The parts are made by suppliers in Japan that were hit by the earthquake and tsunami in March.
Analysts have also blamed a weak flow of fresh products coming to market. And Renault's head of sales and marketing, Jerome Stoll, acknowledged that the company had underestimated the resilience of the market in the first half and had been caught with insufficient vehicle inventories early on in the year and hadn't been sufficiently reactive. The situation is starting to get back to normal, he told a press conference, adding that the company is reviewing its market-forecasting system.
Renault's plants will be working flat out in the second half to reduce the order backlog that for some Dacia models has resulted in delivery times of three to four months, compared to a normal delivery time of 1.5 to two months, Mr. Stoll said.
Renault's overall European market share contracted by 0.7 percentage point to 10%. Sales in France fell 9.9% in the first half, and Renault's share of its key home market contracted by 3.3 percentage points to 25.2%. Mr. Stoll said Renault's year-end share of the core French market should be close to the level of end-2010.
Six-month sales of the Renault brand grew 5.7% world-wide to 1.14 million vehicles, while sales of the group's no-frills Dacia brand sold in Europe, North Africa and the Middle East fell 3% to 177,000 vehicles and those of its Renault Samsung Motors subsidiary in South Korea slumped 35% to 56,000.
In June alone, world-wide sales fell 7.8% from a year earlier, with those of the Renault brand down 4.2%, those of Dacia down 17% and those of Renault Samsung Motors down 33%.
"With both market and order intake exceeding our forecasts, combined with low stock levels at the end of 2010, the group was unable to deliver and register a sufficient number of vehicles," Renault said in a statement. It noted that its unfilled French orders at the end of June were 18% higher than a year earlier.
For the full year, Renault said it expects 3% to 4% sales growth in the world market compared with 2010, with the European market expected to be flat to down 2%. The French market should be 4% to 6% lower this year, the company said, a more optimistic forecast than the 8% fall it had predicted earlier this year.
But the company predicted that the supply difficulties that have held back sales in Europe will gradually be reduced starting in 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, adding that year-end share of the core French market should be close to the level of end-2010.
Jerome Stoll, head of Renault's sales and marketing, forecast that sales for the full year will set a new record after the 1.9% increase in the first half.
Brazil has become Renault's third most important market after France and Germany due to a 25% jump in sales there in the first half. In Russia, its sales surged 76%.
