Hugely Successful Duster SUV Leads The Way
Alone amongst non-German European mass car manufacturers, Renault has managed to keep in the black, just, thanks in general to its downmarket subsidiary Dacia and its successful SUV the Duster in particular.
According to Deutsche Bank, Renault is building Duster capacity in third world markets of 370,000 a year, with 180,000 in Romania, 60,000 in Brazil, 35,000 in Colombia, 70,000 in Russia and 40,000 in India. The sales target is 300,000 Dusters in 2012 and the peak 370,000 in 2014.
The Duster is hugely profitable.
“We estimate Duster will generate this year revenues of €3 billion with an operating margin of €400 million or a high 15 per cent of sales,” Deutsche Bank analyst Gaetan Toulemonde said in a report.
Renault’s automotive division reported an operating profit of €87 million in the first half of 2012, down 35 per cent from the same period of 2011, but consumed €200 million of cash.
Dacia had a market share of 1.6 per cent in Western Europe in the first half of 2012 with sales of 100,000 of its three main models, the Logan, Sandero and Duster. By the end of the year the Lodgy MPV and Dokker van will appear.
Bottom line boost
Toulemonde says Dacia sales targets for Western Europe are hugely ambitious, with a target of 450,000 in 2014 for a market share of 3.5 per cent. This will also boost Renault’s bottom line.
“We estimate that Dacia earnings represent 50 per cent of the whole entry line up profit of €400 million in 2012. We believe that it is only thanks to Dacia (and Renault’s banking subsidiary) that European operations of Renault are not loss making this year,” Toulemonde said.
Neil Winton – September 3, 2012
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