VEILLE STRATÉGIQUEGROUPE RENAULT

FDI – GROUPE POUND

PLAN

1. Current close-up of automotive industry

2. Renault’s current situation

3. SWOT Analysis

4. « 3B » Analysis Conquest of the Indian Market

1. CURRENT CLOSE-UP OF AUTOMOTIVE INDUSTRY

A marke t shaken by the economic c r i s i s . . .

Restructuring of « mature » markets (Europe and North America)• 500-600 cars/1000 habitants• New target: Less oil consumption and less CO2 emissions• American companies survives thanks to direct aids, Europe thanks

strategic aids

Development of « new » markets China:

100 cars/1000 habitants Massive financial aids from government (30% of crisis aids for

automotive industry) Big stock of Lithium – Electric cars Exponential economic growth (+8% GDP/capita) and steady

growth of automotive infrastructures

Development of « new » markets India

8 cars/1000 habitants and big growth on purchaising power 10 years late compare to China Less focus on export (13-17% of production) Little cars Forecasts: +12-14%/year production increase to 2016

Russia 2007: Expert global agreement say Russia will overtake

Germany 2009: -55% car sales AvtoVAZ, incontested market leader, touched the stoppage of

payment last month (CA – 46%, 50 000 job loss forecasted)

1. CURRENT CLOSE-UP OF AUTOMOTIVE INDUSTRY

2. RENAULT’S CURRENT SITUATION - BRANDS

DACIA1999: Renault buy Dacia, first rumain manufacturer and modernize their factories.

• Key values: Simplicity, Modernity and Robustness bound to inedit report quality/price.

Renault Samsung Motors 2000: Renault take back Samsung Group brand and become first european manufacturer based on south-corean market.

• Renault Samsung Motors become a success example in a country close to foreign investments

2. RENAULT’S CURRENT SITUATION - BRANDS

Renault – Nissan MergerMarch 1999: Renault – Nissan become the first

partnership between European and Japanese companies.• This cooperation don’t stop strengthening in all the domains, of the production and the marketing. • Creation of RNPO (Renault Nissan Purchasing Organization) which cover 100% of purchases.

AvtoVAZ PartnershipFebruary 2008: AvtoVAZ and Renault get into a new strategic alliance.

• AvtoVAZ is the first Russian manufacturer with 23% of share market

2. RENAULT’S CURRENT SITUATION

TYPES DE VEHICULES VENTES 2009 / % VAR YTD

Véhicules particuliers 2 032 565 / +0.7%

Véhicules utilitaires 276 623 / -24.1%

TOTAL 2 309 188 / -3.1%

3. ANALYSE S.W.O.T

STRENGTHS

Successful alliances with:

NISSAN11 year successCompany growth profitability (from 4 to 6%)Opens US and Asian markets

DACIA Attracts “lower end” new customers Huge success of models Logan and Sandero

SAMSUNG MOTORS Opens the North Korean marketElectric propulsion technology transferDevelopment of new platforms (QM5/Koleos)

3. ANALYSE S.W.O.T

STRENGTHS

Carlos Ghosn: a symbolic figure

Leaders on new technologies Low consumption thermal engines

Electric vehicles

3. ANALYSE S.W.O.T

STRENGTHS

Efficient cost reduction strategy -25% between 2007 and 2009

Strategic choices for new production sites Tanger : 200 000 vehicles/year from 2012 onwards Valladolid : Production of the Twizy E Turkey : Production of the Clio4

3. ANALYSE S.W.O.T

WEAKNESSES

AvtoVAZ Alliance: A costly failure

A huge lack of cash Has about 1 billion € of stocks left Still has about 6 billion €s of loan to reimburse to the

government 2009 Formula 1 season hampers its image

« CrashGate » crisis Very poor results Last minute buy by the Genii group

Nearly no presence on the booming Chinese market

3. ANALYSE S.W.O.T

OPPORTUNITIES

End of crisis ... ?

New growing markets (China, Russia, Brasil, India, ...)

Alternative vehicles = New & Open market Who will be the first to conquer it?

3. ANALYSE S.W.O.T THREATS

Many competitors – Chinese manufacturers on the rise

Possible drop of sales in 2010 due to the end of the “cash for clunkers” scheme Has to maintain high bonuses to sell excessif stock

Customers and gouvernments are more and more demanding Euro IV and V regulations (ecology and consumption) Want always more technological

Alliances and changes are going very fast Necessity to be very reactive

4. ANALYSE « 3B »INVEST THE INDIAN MARKET

BUT: Invest the fast growing and high potential Indian market

8 vehicles/1000 inhabitants Very fast growing living standards 12 to 14% expected increase in production until 2016

BESOINS: Make an alliance with a local manufacturer

Assess customer needs Technology transfer Local production sites

A market exclusively aimed at small Ultra Low Cost cars

BASES: Highly competitive market (Nano by TATA) Investments might not payback (Alliance fails, product does not

appeal, ...) Market starting to expand and in constant evolution

necessity to keep a close eye on changes

THANK YOU FOR YOUR ATTENTIONANY QUESTIONS ?