Japan Earthquake Disruption Looks Manageable
Renault of France’s sales jumped 15 per cent in the first quarter to €10.4 billion and investors said this showed the company was improving its product mix and pricing.
Renault, and its compatriot Peugeot-Citroen, only report sales in the first and third quarters, and reveal profits after the first half and whole year.
Citigroup Global Markets auto analyst Philip Watkins said Renault sales figures pointed to much better product mix and pricing than anticipated by markets, and was heavily influenced by the success of the new Dacia Duster and light commercial vehicles.
Watkins said Renault’s performance would have been even better but for the supply chain disruption from the Japanese earthquake and tsunami.
The threat of disruption is still there, but Watkins said that Renault’s experience suggests a soft landing.
“”Though it (Renault) does still point to the potential for electronics component shortages to disrupt production from June onwards, it does seem to us that the kind of full-scale disruption that the market expected a few weeks ago is looking increasingly unlikely, with manufacturers finding ways to minimise disruption through alternative sourcing and altered shift patterns,” Watkins said.
Deutsche Bank also liked the latest Renault numbers and said better sales with positive mix, and the three year plan’s cost reductions were key to the core business recovery and would allowed investors to progressively forget the recent spy scandal.
Neil Winton – May 1, 2011
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