Listening to some commentators, it would be the fault of Espace 5 which sells badly, and breaks down in its presidential livery. It is also the fault of the Talisman, a wise car immersed in an era where good old sedans are only sold in premium version. The fault finally to Queen Clio who gets the pawn beaten by the Princess Peugeot 208. These are all reasons that would justify the loss suffered by Renault during its 2019 financial year.
It’s not just a sham, but a staggering 140 million euros. Unheard of since 2010, when the hints of the financial crisis had plunged the world industry in general, and automobile in particular, into a slump never seen since 1929. Suffice to say that the business is rather serious. And it is seriously taken into account by the management of the Losange which does not evacuate, as it has already done, job cuts, or even the closure of a French factory, Flins in this case.
Even flaring flops do not explain the losses …
Suddenly, everyone accuses the blow and wonders who was able to make the blow: the Clio 5, the Espace 5 or the Talisman 1. If the versatile city car was overtaken in January by its enemy 208, there is nothing to say that it will not end the year with the race leading in France and even in Europe.
As for the Espace and the Talisman, Renault has suffered some resounding flaws which, from Vel Satis to Avant-Garde, including BeBop and Wind, have never plunged it into the abyss of financial losses. The truth is therefore to look elsewhere than in chaotic career products.
… the Chinese recession either
In China for example? It is clear that the period is complicated for all the brands which intend to achieve most of their objective in the Middle Kingdom. Sales collapsed 7.5% in 2019, after already falling 6% in 2018. A big blow for the main world groups, but not for Renault. The Diamond is the last to have thrown itself into the Chinese battle in 2016. Its activity is in its infancy and has come up against, after only a year and a half of presence, the recession of the auto market there . A recession with little consequence for him, little developed in the country. The Chinese cause is therefore not sufficient to explain the losses of Renault.
What if, rather than being in China, the reason for this bad luck was nested in Japan? At Nissan precisely. The Japanese recorded its worst financial year for 10 years in 2018-2019, with a profit decline of 57%. A drop record never seen in a decade? This is very similar to Renault’s poor performance. And for good reason: the diamond holds 43% of the shares of the Japanese manufacturer thanks to the game set up by Carlos Ghosn for the Alliance.
Suddenly, when Nissan coughs, Renault is seriously ill and dividends are absent. And no way to redo the dragee this year: the Japanese management plans a new loss of profit of 26%, and warns its shareholders that it will not pay more dividends this year than last year.
The fault of a more financial than industrial strategy
This observation, and the social damage it risks causing, demonstrates once again the risks of betting everything on financial profits, which consist of a very large part of the dividends from another company. Renault is not a trader playing on the stock market, but an industrial company whose resources must above all come from the sale of cars. To forget, as the Ghosn system has done for years, there is a risk of becoming disillusioned.
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