Dongfeng- Renault Faces Red Ocean, HU Xindong: Take it Slowly

On 12 May, Nissan announces its financial report. Net profit of Nissan has increased 14% to 3.8 billion dollars up to April 31, because Japanese Yen deprecation and sales growth in China and North America. Global sales of Nissan has increased 5.6% over last year to 5.19 million cars. In financial year 2014, Nissan expects small 4.1% growth to 3.94 billion dollars because Japanese consume tax increase may hurt automobile sales.

60-yr old Carlos Ghosn is appointed as Renault CEO again on April 30, which just before Nissan financial report publish. Ghosn Renault development theory will continuos for the next 4 years. According to Renault sales goal Ghosn made, the company shall realize 50 billion euros sales up to year 2017.

What’s noteworthy, Ghosn has his long term goal for Renault, which shall make the company as one among the top 3 automobile companies. In year 2013, alliance among Renault, Nissan and Autovaz has realized sales of 8,266,098 cars, which is far distance from the top 3 companies: Toyota, VW and GM. However, Hyundai- KIA is getting closer.

Sales of Renault was similar with Nissan when the alliance starts in year 1999. Now, the alliance reply on Nissan, whose sales is double over Renault does and probability is better. However, oversea strategy of Renault does not pay much attention in China yet. On April 24, Renault announces that sales of the company for the first quarter has increased 5% because of European market. Total sales mount to 636,239 cars, but total income has decreased 0.1% because of exchange rate. And sales income slightly decreases as well, which from 8.27 billion euros down to 8.26 billion euros.

Nissan growth slows down. Meanwhile, Ghosn wants to make Renault bigger. At present, the major market of Renault, Russia and Brazil, are unstable. Sales of overseas market, except European, shrinks 7.9%. It takes 43% of total sales of Renault from 49% before. The third large market Russian has decreased 3.7%. However, Renault sells 8,214 cars in China, which has increased 57% over last year. It brings back some confident for Ghosn .