Assignment 3: Renault
Describe the French automotive industry
and its main features
In 2008, in terms of value, France represents 14.1% of the European automobile market. On the other hand, in terms of value, Germany represents 20.2% of the European automobile market. But this simple comparison hides some differences in terms of strategy. For example,French automobile manufacturers dominate the market with international players generally doing less well in France. On the contrary, German automotive industry is well-spread all around the world, and keeps a luxurious and strong brand image.
To clearly define the whole industry, we have to distinguish the automotive aftermarket from the automotive manufacturing industry. The automotive aftermarketincludes service parts, wear & tear parts, mechanical parts, tires, crash repair and consumables & accessories. But it’s not the most significant side of the French automotive industry. We’re going to focus on the second kind of industry: the automobile manufacturing industry. It covers all global sales of new cars and light commercial vehicles. The country’s automobile manufacturing market hasremained relatively unscathed following a period of economic downturn in Europe. The leading sector in terms of volume is the passenger cars sector, and domestic automobile manufacturers such as Renault and PSA dominate the French market.
The competitive panorama
On the current French automotive markets the main automotive manufacturers are PSA Peugeot Citroen and Renault. TheFrench automotive industry lived a really bad period due to the crisis. In order to avoid bankruptcy the French government had even implemented a support plan in order to enable the survival of the French automotive industry and made them a loan of 6 billion Euros. Even if the crisis is finished the revival of the automotive industry will not take place before 2011.
PSA was formed through a mergerbetween Peugeot and Citroen. Nowadays, PSA Peugeot Citroen is among the largest automobile makers in Europe, manufacturing cars and other vehicles under the Peugeot and Citroen brands. The company operates in a number of areas including automotive equipment, automobile transportation and logistics, and financial services. PSA manufactures a range of vehicles including petrol, diesel and electricpassenger and light commercial vehicles. Renault is also one of the most influent French automobile manufacturing groups that designs, produces and markets a range of passenger, light commercial and agricultural vehicles. The group is a worldwide multi brand manufacturer, through an alliance with Nissan and its ownership of Dacia of Romania and Samsung Motors of South Korea. Renault-Nissan, thecommon strategic management structure of the Renault-Nissan group, is equally owned by Renault and Nissan. It has manufacturing plants in Mexico, South America and Europe.
The two other actors of the French automobile market are Daimler Chrysler AG and Toyota Motor Corporation. Daimler Chrysler AG is the world's is third largest car producer in terms of sales. DaimlerChrysler primarily engages inthe development, manufacture, distribution and sale of passenger cars and commercial vehicles but also makes a wide range of automotive and transportation products. The company also provides a variety of services relating to the automotive value-added chain. Toyota Motor Corporation develops and manufactures vehicles, and is one of the largest car manufacturers in the world offering a wide rangeof products from mini 3
vehicles to trucks. One manufacturing unit is implanted in Valenciennes, in the north of France.
A global strategy
The fact is that the automotive industry doesn’t get away from the economical crisis. 2009 will be one of the worst years for the French industry. For example, Renault has already cut 15000 jobs since 2007**, and it’s just not over yet. On the...