Investors yawned when Renault announced that Carlos Tavares would replace Patrick Pelata as number two to CEO Carlos Ghosn, although news from Paris suggesting that the French government would be taking a more active role in managing the company might have caught their attention.
Pelata lost his job after the botched industrial espionage investigation.
Ghosn, in an interview with Le Parisien and apparently responding to government pressure, said he wants Renault to develop more upscale models, evoking memories of the failed Avantime and Vel Satis. Media reports suggested the government want Ghosn to spend more time managing Renault and less with the alliance’s Nissan of Japan partner.
The French government owns 15 per cent of Renault.
The FT’s Lex column had some sympathy for Renault management’s plight, then pushed for the hardy perennial, a merger with Nissan.
“Current and recent management does not deserve all the blame. Renault is just not in a good place. The market in Europe, which still accounts for almost two-thirds of sales, remains stagnant. Renault’s core model line-up is too skewed towards lower margin small and medium models. The best way to help Renault become a truly global company is clear enough: a full merger with Nissan. That would address its topsy-turvy valuation. Subtract the market value of Renault’s stakes in Nissan, Avtovaz of Russia, Daimler and Volvo, and the stub value of the French car maker is negative,” Lex said.
Renault’s compatriot Peugeot is also less than favoured by investors, according to Bernstein Research’s Max Warburton.
“As for the French, interest levels (from investors) are near zero. We can just about get a discussion going on Renault. As for Peugeot; forget it. Do you want to know the total number of incoming calls/questions we’ve received on Peugeot in 2011? The answer is two,” Warburton said in a report on how the Germans in general are his favourite investment, and BMW in particular.
Neil Winton – June 15, 2011