Text/Ink White
Editor/Zhou Xiongfei
Renault, which rarely has a voice, has recently had a new dynamic.
Recently, according to Bloomberg, citing people familiar with the matter, French car company Renault is considering selling part of its stake in Nissan automobile in order to raise a large amount of funds to support the development of its own new energy vehicles, while also alleviating long-term tensions with alliance partner Nissan.
Renault and Nissan have an alliance dating back to 1999. Nissan, which had lost money for eight consecutive years, found Renault, which was a temporary success, so that the latter could save its own decline. In exchange, Renault acquired a portion of Nissan's stake and co-established the Renault-Nissan alliance with Nissan.
Nissan, with the help of Renault, quickly turned a profit. However, with the development of the two major car companies, the contradictions between each other have become more and more serious. The main contradiction is that Renault has the right to vote on Nissan's decisions, while Nissan as a partner has no voting rights over Renault, in other words, it looks like an alliance, but its status is not equal.
With Renault selling part of the equity of Nissan, the inequality between its equity and Nissan can be reduced a little, so as to alleviate the contradiction with Nissan. In the industry's view, Renault may be showing favor to Nissan through this move, and behind this is also to allow Nissan to support the development of its own new energy vehicle business.
For the layout of the new energy field, Nissan can be regarded as a "forerunner".
As early as 1947, its first pure electric vehicle was launched, and since then it has also continued to lay out in the field of new energy. For now, although Nissan is a player in the global new energy field, it has accumulated technology in the field of new energy for many years, which is also a big resource for Renault.
In order to develop the new energy business, in addition to currying favor with Nissan, Renault also set his sights on Geely Automobile, which has also been in the field of new energy for a long time. In August last year, Renault and Geely signed a cooperation agreement announcing that they would jointly develop in the field of pure electricity and hybrid vehicles in order to obtain sales in the new energy market in China and even the world.
The reason why Renault will frequently make moves in the past two years to further accelerate the development of the new energy business is also because its overall business has been in trouble.
Two days ago, Renault released its financial report for the first quarter of this year, showing that its global sales in the first quarter were 550,000 vehicles, down 17.1% year-on-year, which is also the third consecutive year that its sales are declining. Renault's annual sales in 2021 are only 2.7 million vehicles, which is also in a year-on-year decline.
A large part of the reason for this dilemma is that Renault has tried several times to enter the important chinese automobile market, but in the end it has failed. To make matters worse, with the impact of this year's Russian-Ukrainian crisis, Renault also lost russia, an important market.
If this equity transaction goes well, Renault will most likely get the help of Nissan after that, coupled with geely's support, Renault's unspiring new energy vehicle business may be able to grow in order to drive the overall sales increase. For Renault, can this expectation be achieved?
1, please, cooperation, Renault is anxious
In order to promote the development of the new energy business, Renault has embarked on the road of selling shares for money.
According to Bloomberg, Renault is preparing to sell part of its stake in Nissan to raise billions of euros to support its further layout toward electrification and even achieve an independent listing of the new energy vehicle business.
As soon as the news broke, Renault and Nissan, as parties, responded by saying they would not comment. As a result, this news quickly became the focus of attention in the industry, because in the industry's view, Renault sold Nissan shares not only in exchange for money.
At the same time, it is also to alleviate the long-term contradictions with Nissan.
Founded in France in the midst of the second industrial revolution, Renault launched its first model, the 4CV, in 1946 based on research patents for a supercharged engine, spark plugs and detachable wheels, which continued production from that year until 1961, becoming Renault's first model to produce more than one million.
Renault 4CV model, picture source Renault China official micro
Since then, Renault has also introduced models such as Dauphine, Estafeete, Renault 16, Safrane and Megane, and with the launch of these models, Renault has become one of the most famous car companies in the European market in 1999.
At that time, Nissan, far away from the ocean, had fallen into decline. According to public data, as of 1999, Nissan has been losing money for 8 consecutive years, with a cumulative loss of more than 20 billion US dollars, coupled with the Asian financial crisis that broke out in 1998, which made it even more on the verge of bankruptcy.
Perhaps seeing Renault's strength, the devastated Nissan turned to him for help that year.
For this plea, Renault took over and promised to change Nissan's decline a year later. However, in exchange, Nissan needs to form an alliance with Renault, which is the future Renault-Nissan alliance.
In the alliance, cross-shareholding is used between members to limit power, with Renault holding 43% of Nissan's shares, while Nissan only holds 15% of Renault's shares, the former has a veto over the latter, while the latter does not have that authority over the former.
Although there was a large imbalance in this cross-shareholding ratio, there was no objection to Nissan, which was weaker at that time. Renault also fulfilled its promise a year later.
By consolidating Nissan's internal businesses and cutting out unprofitable businesses, such as the once-proud space division, Nissan turned a profit in 2000 and made a profit of $2.7 billion, making it one of the world's most profitable automakers from the brink of bankruptcy.
After Nissan regained profitability, Renault once again proposed the "108 Plan" for Nissan, that is, to achieve annual sales of 1 million vehicles, zero debt and achieve the highest level of operating profit margin of 8% for global automakers.
By 2005, Nissan had not only achieved this plan, but its models were also popular with consumers around the world. It is also under the rapid development of Nissan that the contradiction between it and Renault began to slowly intensify, and the main reason behind this is that Nissan slowly opened up the gap with Renault.
Take 2011 as an example, when Nissan's global sales reached 4.67 million units, an increase of 14.4% year-on-year; in contrast, Renault achieved global sales of only 2.72 million units that year, an increase of only 3.6% year-on-year. In contrast, the former's sales in that year were almost 58.24% higher than the latter's.
From that year until 2015, Nissan's annual sales volume will be more than 45% higher than Renault's. Combined with this gap in sales strength and the inequality in shareholding ratio with Renault, Nissan began to rebel for its own interests.
2011-2015 Renault and Nissan global sales comparison, data from public data, connected travel mapping
At the end of February 2016, Nissan announced at a press conference in Tokyo that it was ready to buy back some of its shares from Renault, which was also another struggle against unequal relations with Renault. Just months before announcing its share buyback, Nissan had tried to claim its voting rights within the Renault Group, but failed.
In the face of Nissan's proposal to buy back shares, Renault announced that it agreed to sell some of its shares in Nissan Motor, but also said that it would ensure that its shareholding ratio within Nissan Motor Vehicles remained unchanged. Facts have also proved that this transaction has not affected Renault's absolute right to speak about Nissan since then.
As everyone knows, just 6 years later, Renault is likely to voluntarily give up a part of its shareholding in Nissan.
In terms of equity, Renault currently owns 1.83 billion shares of Nissan, accounting for about 40% of Nissan's shares, and if all of these shares are sold, Renault can probably get 7.1 billion euros (about 49.7 billion yuan) in revenue.
But in the view of Bloomberg analysts, Renault will most likely not sell all the shares, but will only reduce its share of Nissan to about 15%, which at current prices will allow Renault to obtain about 4.65 billion euros (about 32.6 billion yuan) in revenue.
According to a number of media reports, Renault is trying to facilitate this transaction and is still seeking a third-party acquisition. For buyers, Nissan could be one of the buyers bidding for the stake, with Nissan's chief operating officer, Ashwani Gupta, traveling to Paris next week to discuss buybacks with Renault CEO Luca de Mayo.
In the industry's view, if Renault's share sale transaction can be completed, whether the buyer is Nissan or not, it can reduce its shareholding ratio in Nissan, and even achieve a balance between the two parties (15:15) to achieve the purpose of alleviating the contradiction with Nissan.
The reason why Renault will do this is also because of the consideration of the development of the new energy vehicle business.
The layout of the new energy field has also begun very early. In 2013, it launched its first new energy model, renault ZORE, and since then Renault has also launched hybrid models such as Clio, Captur and Megane estate based on this car, but in comparison, Renault ZOE has become the best-selling new energy model under the Renault brand in the European market.
In the Chinese market, Renault also has a layout in the field of new energy. For example, in 2018, Renault reached a cooperation with Jiangling New Energy, and the two sides will achieve joint research in the field of new energy; a year later, Dongfeng Renault also launched its first new energy model Renault eNo, and then Renault and Jiangling New Energy's cooperative new energy model "Yi" series was also listed last year.
In this way, although Renault has long been laid out for new energy in China and overseas markets, there are not many actions. But since last year, Renault has begun to accelerate in the field of new energy.
According to Bloomberg, Renault is promoting the development of its new energy vehicle business, including the introduction of Nissan's investment in it, and Nissan will also become a partner of Renault's traditional hybrid and fuel vehicle business in order to better provide technical support.
In addition to Nissan, Renault also took a fancy to the domestic independent car company Geely Automobile last year. In early August last year, Renault and Geely jointly announced the signing of a memorandum of understanding to establish a long-term strategic partnership to develop hybrid vehicles in a fast-growing market in China and around the world.
Renault officially announced that it had reached a cooperation with Geely, and the source of renault China official micro
In addition to cooperation with car companies, Renault also released a new strategic plan for the development of new energy business "Renaulution" at the beginning of last year, announcing that 90% of the vehicles sold by 2030 will be new energy models, and preparing to stop selling fuel vehicles in 2030, which is also the first time it has proposed relevant plans.
From this point of view, Renault on the one hand through the sale of shares to please Nissan, on the other hand also with Geely to establish cooperation, together with the development of cars, behind this frequent action is actually Renault's acceleration in the field of new energy, and behind this is actually revealed the dilemma that Renault is facing.
2. Reynolds who is in trouble
Two days ago, Renault released a not-so-good report card.
According to the financial report data, Renault achieved revenue of 9.748 billion euros (equivalent to 68 billion yuan) in the first quarter of 2022, down 2.7% from 10.015 billion euros in the first quarter of 2021. The reason for the decline is closely related to the decline in sales.
In terms of sales, Renault achieved 552,000 units in the first quarter of this year, down 17.1% year-on-year, which is also its lowest quarterly sales since the 2009 global financial crisis. For this decline, Renault attributed the reason in the earnings report to the global semiconductor shortage and the Russian-Ukrainian crisis.
It should be noted that the decline in Renault's global sales has actually begun in previous years.
At the beginning of 2019, Renault, like many European car companies, released its own sales data for the previous year. According to the data, Renault achieved global sales of 3.8843 million units in 2018, an increase of 3.2% compared with 3.7616 million units in 2017.
As everyone knows, from this year on, Renault began to fall into the predicament of successive years of sales decline. In 2019, Renault announced sales of 3.7537 million units, down 3.4% year-on-year compared with the previous year; and in 2020, this sales volume fell to 2.9498 million units, a year-on-year decline of even 21.3%.
In 2021, Renault's global sales are still in decline, with sales of 2.696 million units in that year, down 4.5% year-on-year. This also means that Renault's sales have been in decline for three consecutive years since 2019.
Renault's global sales volume and year-on-year change trend in 2018-2021, data from public data, connected travel mapping
If you put this sales performance on a global scale, you can see that Renault also does not have much advantage.
According to global data firm Mark Lines, Toyota ranks first with 10.5 million vehicles in the top 10 global car sales in 2021, followed by Volkswagen in second place with 8.882 million units and Renault-Nissan Alliance in third place with 7.68 million vehicles. After that, there are car companies such as GM, Honda, Ford and BMW.
For Renault, it is generally used as the Renault-Nissan alliance to appear in the sales list of each year, but if it is compared alone, its sales of 2.696 million vehicles can only rank eighth in this list, missing the top five sequence.
In response to such a continuous decline in sales, Renault attributed the reason to the impact of the global epidemic and supply chain shortages, but in the industry's view, there is also a certain relationship with Renault's repeated defeats in the Chinese market.
With the promotion of the government in the 1990s, a wave of joint venture development appeared in the domestic market, FAW-Volkswagen, SAIC-GM and Guangzhou Peugeot and other joint venture car companies appeared one after another, Renault Automobile also followed, in 1993 with China Aerospace Sanjiang Group Co., Ltd. signed a joint venture contract, the two sides at the end of the year with a 45:55 share ratio - Sanjiang Renault Automobile Co., Ltd. (hereinafter referred to as Sanjiang Renault).
After the establishment of Sanjiang Renault, the main product was the production of the Trafic series of light buses, which were officially launched on the market in 1995. Since the engine of this model uses Renault's self-developed engine, many parts need to be imported from France.
For this reason, the localization of the parts of this model has not been well realized, resulting in the price of the vehicle remaining high, and sales will naturally be greatly affected. According to Gaz Motor, the car sold its best year after mass production, with only more than 1,700 units sold nationwide.
After the failure of the joint venture business between Renault and Sanjiang Group, Renault did not withdraw from the Chinese market, but became a "fragrant food" that some car companies competed for.
First Brilliance Auto announced in May 2001 that it would take over 55% of Sanjiang Group's equity in Sanjiang Renault, thereby jointly developing the car project with Renault, but finally due to equity disputes, this restructuring matter was not resolved; three years later, Xiang Torch, which was engaged in heavy truck business, also announced that it would open up a joint venture with Renault through restructuring, but finally fell into shelving.
In the years since, Renault can only sell its models in the Form of imports in the Chinese market, and it was not until 2013 that Renault's localization was again elevated to the agenda, and this time the cooperation object was Dongfeng Motor.
In that year, based on the reorganization of Sanjiang Renault, Renault and Dongfeng Motor established a joint venture car company, Dongfeng Renault Automobile Co., Ltd. (hereinafter referred to as "Dongfeng Renault") with a 50:50 share ratio. Three years later, Dongfeng Renault's first model, Correga, was officially launched, and then Dongfeng Renault also introduced Renault's SUV models, Coreyo and Corenin.
Due to the launch of these models, Dongfeng Renault also ushered in a "highlight moment" after its establishment.
In that year, Dongfeng Renault's total domestic sales volume was 72,000 units, an increase of 140% year-on-year, and it was also in that year that the Chinese market became one of Renault's largest markets in Asia after Russia. But such highlights did not last long.
According to public data, dongfeng Renault's domestic sales in 2018 fell to 50,100 units, down 30.6% year-on-year compared with 2017; and in 2019, its sales only achieved 18,500 units, a year-on-year decline of 63.1%.
In the face of this decline, dongfeng Renault can not hold up in 2020. In April of that year, it announced that Renault Intends to transfer its 50% equity in Dongfeng Renault, and Dongfeng Renault will stop Renault brand-related business activities.
Dongfeng Motor issued an announcement on the equity transfer, screenshot from the announcement
For this statement, Renault officially said that it was not to withdraw from the Chinese passenger car market, but at that time, in the industry's view, this move represented another failure of Renault's layout in China. And it is precisely because there is no support from China, an important market, that Renault has experienced such a tragic sales decline in 2020.
Without the sales supply of the Chinese market, coupled with the impact of the global epidemic, Renault's sales in 2021 will continue to be in decline.
But unexpectedly, this year, Renault once again lost one of the world's most important markets - Russia.
At the end of February this year, the Russian-Ukrainian crisis was on the verge of breaking out, due to the impact of the war, including Volkswagen, Ford and Mercedes-Benz, including traditional car companies have announced the suspension of Russian business, including Renault, which also announced its formal withdrawal from the Russian market at the end of March, and for the assets of the Renault factory after the withdrawal, according to the Russian Ministry of Industry and Trade, it is possible to nationalize them as assets.
According to data released by Renault, sales in Russia accounted for 17.89% of Renault's total sales in the first quarter of 2022, which shows that Russia has become the largest sales market in Renault Asia. It also meant that, with the effects of the war, Renault was forced to abandon the Russian market, which was seen as a pillar of sales.
On the one hand, the European market affected by the epidemic, on the other hand, the Asian market has been lost one after another, and in the industry's view, the decline in Renault's global sales is also normal under the blocking of these two major pressures. For Renault, it may not be able to accept this situation, so it has to curry favor with Nissan and partner with Geely, and pin the hope of breaking the game on the development of the new energy vehicle business.
3. Is there any hope for Renault's new energy business?
Renault will have confidence in the new energy business, and it is not without reason.
As can be seen from the above, Renault's global sales in the first quarter of this year had a double-digit year-on-year decline, but if we look at the segmented business, the new energy business represented by Renault's pure electric and hybrid models achieved a year-on-year increase of 13% in the first quarter of this year.
This phenomenon also occurred in the sales performance of the whole year of 2021. Renault's global sales were in a year-on-year decline that year, but the new energy business achieved sales of 137,000 units, an increase of 9.88% year-on-year. From this point of view, in the context of Renault's overall automobile business in decline, its new energy field has achieved contrarian growth.
But if Renault's achievements in the field of new energy are placed on a global scale, there are not many such positive trends.
According to EV Sales statistics, tesla ranked first with 936,100 units in the global sales ranking of new energy vehicle companies in 2021, followed by BYD, SAIC-GM-Wuling, Volkswagen and BMW with 593,800 units, 456,100 units, 319,700 units and 276,000 units, respectively.
Renault, on the other hand, did not qualify for the top ten rankings, ranking thirteenth in the sales list with only 136,700 vehicles, compared with Hyundai, which ranked tenth in this list, and sales were also 1.2 times that of Renault, not to mention the distance between the players in the front and Renault.
In 2021, the top 15 sales volume of global new energy vehicle companies are ranked, and the data comes from EV Sales and the mapping of online travel
This decline is also manifested in the domestic market.
According to the survey of wired travel, in terms of new energy passenger cars, the only new energy models currently on sale are the "Yi" series models positioned as compact cars, and the Renault eNo launched by Dongfeng Renault has been discontinued. For the former model, since its listing last year, it has been in a situation where no one cares.
According to the data released by the Association of Automobile Manufacturers, since the official launch of the "Yi" series of models in September last year, its sales volume in the month was only 41 vehicles, and although sales have increased in the following months, only 827 models have achieved annual sales last year.
This sales performance is not even as good as that of new energy compact cars - Toyota Corolla, BYD Qin PLUS, Xiaopeng P in May sales of 1/5, after all, these models sold 30677 units, 24287 and 5030 vehicles in December last year.
In the middle of January and March this year, the sales of the "Yi" series of models did not exceed 100 in the first two months, and only reached 103 in the last month. According to the observation of wired travel, the sales volume of this series of models in the past three months is basically at the bottom of the 30th place in the sales list of new energy compact cars.
From this point of view, Renault's previous performance in the field of new energy, if put on a global scale, does not occupy much advantage, and even has no voice in the Chinese market.
For Renault, after uniting Nissan and Geely and accelerating the new energy business, it may be difficult to break through the existing predicament.
First of all, from the perspective of the domestic market, Renault eNotro is the first domestic new energy model launched by Renault in the Chinese market, and since its listing in September 2019, the sales volume of the model in China has reached a total of 3100 units by January 2020, and since February 2020, the sales volume of the model has remained at 0 units.
The reason behind this model will be so unpopular may be due to the false publicity and quality control of Dongfeng Renault. By checking the car quality network, it can be seen that from 2019 to January 2021, consumer complaints about this model have been going on, and problems include no accessories to repair the vehicle, the actual mileage is inconsistent with the advertisement, and the vehicle spontaneous combustion.
Some of the consumer complaints about the Renault eNolds model are screenshotted from the car quality network
Combined with the same decline in the "Yi" series of models, in the industry's view, based on the fact that consumers have not recognized the Renault brand, coupled with the status quo of forming a quality failure and false publicity impressions, even if Renault is helped by Geely, Nissan's technology and even sales channels in the domestic market in the future, it is difficult to make a difference in the domestic market, let alone compete with new energy vehicle companies such as Tesla and Weilai.
In overseas markets, especially in the European new energy market, which is still performing well, Renault will also encounter many challenges and pressures after that.
The challenge first comes from BBA, Volkswagen and Toyota, which are also traditional car companies. These car companies have begun to accelerate the development of their new energy vehicle business in the past two years, of which three like BBA have released their new energy models in the first two years, and Toyota and Volkswagen have also proposed new plans in the field of new energy this year.
In addition to traditional car companies, Tesla's Berlin factory was also officially put into operation in March this year, and with the commissioning of this factory, Tesla's advantages in the European market have further expanded. New energy vehicle companies such as BYD, Chery, Weilai and Xiaopeng have also long regarded the European market as the battlefield to take the lead in going to sea, and have laid out their layouts.
Based on the above analysis, although Renault will most likely get the support and help of Nissan and Geely in the future, it may be more difficult for it to gain an advantage in the new energy battlefield in China and even the world, let alone to help Renault break through the sales dilemma.
Although this is the reality, for Renault, it is also necessary to accelerate the development of new energy business, because this may be its last chance to seize the advantage in the new energy battlefield.
(The head image of this article is from Renault China Official Micro.) ）