Renault cuts global market prediction amid China slowdown, South America woes

Article by Andrew Christian, on July 13, 2015

Renault has downgraded its global industrywide expectations for this year – from a 2% gain down to a 1% increase. The reasons cited were the slowdown in China and the major drop in sales in Russia and Latin America. The company has been focusing on emerging markets to lessen its reliance in Europe.

However, this strategy is being hindered by financial difficulties in Brazil, Russia, and Argentina. The automaker maintains its prediction of a 5% increase for this year’s industrywide European deliveries. It also anticipates a bigger market share as buyers typically flock to new models.

In a statement last Tuesday, Chief Performance Officer Jerome Stoll said that the company will be able to hasten its growth in the second half of the year by reinforcing its position in Europe as well as with the release of many products in 2015.

The automaker reported a slight increase in sales of its cars by 0.7% in the first six months of the year. From 1.37 million deliveries the previous year, the company now posts 1.38 million cars and light commercial vehicles delivered. Its sales in Europe for the first half increased by 9.3% while its Americas’ deliveries declined by 21% and its Eurasian sales (including Russia) dropped 10%.

The economic woes in Brazil and Argentina had hurt sales of its no-frills vehicles like the Duster SUV and Sandero hatchback. It is made worse by the 37% contraction of the Russian market as it is weighed down by worldwide sanctions. Its budget cars, most of which are Dacia models, posted a 5.4% drop in sales to 540,793 units, declining to 39% of total group sales compared to 42% the previous year.

Meanwhile, the company’s mid-market models had a 5.2% increase in registrations. It’s likely that the shift in sales back to mainstream models will continue. Last Monday, Renault presented its new Talisman midsize sedan.

This is the fourth model that the brand is set to release this year. The other three are the Espace minivan, Kadjar compact SUV and the Kwid budget subcompact that is meant for the Indian market.

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