Renault:globalization and some doubts

1992-2007

Freyssenet Michel

CNRS Paris

GERPISA

15th GERPISA International Colloquium

Paris, 20-22 june 2007

Since three years, some difficulties

Fall of market share

Each ten years, a difficult phase

1983-1987

1993-1997

2004- ?

But the importance and the causes of the difficulties

were completely differentFreyssenet M., Presentation, Renault 1992-2007, Globalization and some doubts, Proceedings of Fifteenth GERPISA International Colloquium, "What have we learned about the dynamics of automobile firms and systems over the past 15 years ?", Paris, 20-22 june 2007. Édition numérique : freyssenet.com, 2007, 1,5 Mo, ISSN 7116-0941.

The last fifteen years can be divided in three phases

1993-1997« The quality isn’t enough »

but the constraint of the costs reality

1998-2004The surprising success of innovating car models

The take over and the recovery of Nissan, Dacia and Samsungin a favourable context

2005-200?The failure of several car models

The compatibility problems of innovative strategy with the QCD requirements

Freyssenet M., Presentation, Renault 1992-2007, Globalization and some doubts, Proceedings of Fifteenth GERPISA International Colloquium, "What have we learned about the dynamics of automobile firms and systems over the past 15 years ?", Paris, 20-22 june 2007. Édition numérique : freyssenet.com, 2007, 1,5 Mo, ISSN 7116-0941.

Résultats du Groupe Renault, 1976-2006: marge opérationnelle, résultat d'exploitation et résultat net par rapport au CA, part de la valeur ajoutée dépassant le point mort

-8,0

-6,0

-4,0

-2,0

0,0

2,0

4,0

6,0

8,0

10,0

1945194719491951195319551957195919611963196519671969197119731975197719791981198319851987198919911993199519971999200120032005

année

pourcentage Marge/CA, RE/CA, RN/CA

-30,0

-20,0

-10,0

0,0

10,0

20,0

30,0

40,0

part de la valeur ajoutée dépassant le point mort

marge opérationnelle / CA (avec filiales financières) résultats d'exploitation / CA (sans filiales financières jusqu'en 1992)résultat net / CA (avec filiales financières) Part de la valeur ajoutée dépassant le point mort (VA-DC/DCx100)

Source: Rapports d'activité Renault. Élaboration: Michel Freyssenet 2007

Freyssenet M., Presentation, Renault 1992-2007, Globalization and some doubts, Proceedings of Fifteenth GERPISA International Colloquium, "What have we learned about the dynamics of automobile firms and systems over the past 15 years ?", Paris, 20-22 june 2007. Édition numérique : freyssenet.com, 2007, 1,5 Mo, ISSN 7116-0941.

1993-1997 « The quality isn’t enough »

The fall of the European market, after the first speculative bubble and the German reunification

The failure of the Renault-Volvo merger

The impossibility to pursue a « quality » strategy and to contract new alliances

The shift to an innovative strategy

A cautious internationalization and the privatization of Renault

But the necessity to reduce the costs strongly and immediately:

closure of Setubal, of Creil and of Vilvoorde plants

The pursuit of externalization and the reducing of supplies prices

Freyssenet M., Presentation, Renault 1992-2007, Globalization and some doubts, Proceedings of Fifteenth GERPISA International Colloquium, "What have we learned about the dynamics of automobile firms and systems over the past 15 years ?", Paris, 20-22 june 2007. Édition numérique : freyssenet.com, 2007, 1,5 Mo, ISSN 7116-0941.

Production mondiale du Groupe Renault par type de véhicule, 1945-2006(véhicules particuliers, véhicules utilitaires légers, véhicules industriels)

VP

VUL

VI

0

500 000

1 000 000

1 500 000

2 000 000

2 500 000

3 000 000

19451947194919511953195519571959196119631965196719691971197319751977197919811983198519871989199119931995199719992001 (b)

20032005

années

volume

Source: Rapports de gestion de Renault. Élaboration: Freyssenet M., 2006. Mise à jour 2007

Freyssenet M., Presentation, Renault 1992-2007, Globalization and some doubts, Proceedings of Fifteenth GERPISA International Colloquium, "What have we learned about the dynamics of automobile firms and systems over the past 15 years ?", Paris, 20-22 june 2007. Édition numérique : freyssenet.com, 2007, 1,5 Mo, ISSN 7116-0941.

Les effectifs de Renault (maison mère) en six catégories professionnelles, 1955-2006

0

20 000

40 000

60 000

80 000

100 000

120 000

1 955 1 957 1 959 1 961 1 963 1 965 1 967 1 969 1 971 1 973 1 975 1 977 1 979 1 981 1 983 1 985 1 987 1 989 1 991 1 993 1 995 1 997 1 999 2 001 2 003 2 005

nombre

année

ouvriers/APR

ATPMaîtrise

Employés

Techniciens

IC

Sources: Renault, Annuaires statistiques, Bilans du personnel, Bilans sociaux. Élaboration: Freyssenet M., 1998, 2007

Freyssenet M., Presentation, Renault 1992-2007, Globalization and some doubts, Proceedings of Fifteenth GERPISA International Colloquium, "What have we learned about the dynamics of automobile firms and systems over the past 15 years ?", Paris, 20-22 june 2007. Édition numérique : freyssenet.com, 2007, 1,5 Mo, ISSN 7116-0941.

1998-2004: a series of successes owing to favourable conditions cleverly used

(1) innovating models

The shattering of the second speculative bubble: the « Asian crisis » and the fall of the car sales in the emergent countries markets and in Japan

The inflating of the « new economy » bubble in North America and in Europe and the strong increase of the automobile demand (1997-2000)

The success of the conceptually innovating cars: Espace, Twingo, Scenic, Kangoo…

gives to Renault importants financial means used to jump at new opportunities…

but the requirements of the new profit strategy are not integrated in the socio-productive configuration of Renault

Freyssenet M., Presentation, Renault 1992-2007, Globalization and some doubts, Proceedings of Fifteenth GERPISA International Colloquium, "What have we learned about the dynamics of automobile firms and systems over the past 15 years ?", Paris, 20-22 june 2007. Édition numérique : freyssenet.com, 2007, 1,5 Mo, ISSN 7116-0941.

Freyssenet M., Presentation, Renault 1992-2007, Globalization and some doubts, Proceedings of Fifteenth GERPISA International Colloquium, "What have we learned about the dynamics of automobile firms and systems over the past 15 years ?", Paris, 20-22 june 2007. Édition numérique : freyssenet.com, 2007, 1,5 Mo, ISSN 7116-0941.

Freyssenet M., Presentation, Renault 1992-2007, Globalization and some doubts, Proceedings of Fifteenth GERPISA International Colloquium, "What have we learned about the dynamics of automobile firms and systems over the past 15 years ?", Paris, 20-22 june 2007. Édition numérique : freyssenet.com, 2007, 1,5 Mo, ISSN 7116-0941.

Freyssenet M., Presentation, Renault 1992-2007, Globalization and some doubts, Proceedings of Fifteenth GERPISA International Colloquium, "What have we learned about the dynamics of automobile firms and systems over the past 15 years ?", Paris, 20-22 june 2007. Édition numérique : freyssenet.com, 2007, 1,5 Mo, ISSN 7116-0941.

1998-2004: a series of successes owing to favourable conditions cleverly used

(2) The take over of Nissan

An unimaginable opportunity

The astonishing rapid recovery of Nissan : at least three internal and external favourable conditions

The acceleration of the Alliance (2002)- equal advantages and responsibilities- Fields of autonomy precisely defined- but Renault reinforces its capital control and its leadership on

the Alliance

The realized and forecasted synergies and economies

Freyssenet M., Presentation, Renault 1992-2007, Globalization and some doubts, Proceedings of Fifteenth GERPISA International Colloquium, "What have we learned about the dynamics of automobile firms and systems over the past 15 years ?", Paris, 20-22 june 2007. Édition numérique : freyssenet.com, 2007, 1,5 Mo, ISSN 7116-0941.

1998-2004: a series of successes owing to favourable conditions cleverly used

(3) The take over of Dacia and Samsung

The 5000 euros car project. Its originalityThe conditions of the purchase of Dacia: social and fiscal

conditionsLogan: the success before the launchThe insufficient forecasts of sales and the lack of capacity: bis

repetita

The first foreigner carmaker in South KoreaA New plant ready-to-useA top level R&D departmentbut an error about the perspectives of South Korean market

Freyssenet M., Presentation, Renault 1992-2007, Globalization and some doubts, Proceedings of Fifteenth GERPISA International Colloquium, "What have we learned about the dynamics of automobile firms and systems over the past 15 years ?", Paris, 20-22 june 2007. Édition numérique : freyssenet.com, 2007, 1,5 Mo, ISSN 7116-0941.

1998-2004: a series of successes owing to favourable conditions cleverly used (4) but that hided some structural problems

The reversing of the demand after the shattering

of the “new economy” bubble

The failure or the disappointing sales

of new cars models: Avantime, Vel Satis, Laguna II

The failure in Latin America and Russia

Freyssenet M., Presentation, Renault 1992-2007, Globalization and some doubts, Proceedings of Fifteenth GERPISA International Colloquium, "What have we learned about the dynamics of automobile firms and systems over the past 15 years ?", Paris, 20-22 june 2007. Édition numérique : freyssenet.com, 2007, 1,5 Mo, ISSN 7116-0941.

Production mondiale de véhicules particuliers de Renault par modèle1945-2006

Dauphine

Juva

R8-R10

R25

Safrane"niches"

0

500 000

1 000 000

1 500 000

2 000 000

2 500 000

1945194719491951195319551957195919611963196519671969197119731975197719791981198319851987198919911993199519971999200120042006

année

volume

Kangoo

Modus

Source: Rapports de gestion RenaultÉlaboration: Freyssenet M., 2006.

Logan

Vel Satis

4cvR4

R6

R5

Twingo

Clio

Frégate

R12 R9-R11

R19

Mégane

R16

R20

R18

R30

R21

Laguna

Espace

Freyssenet M., Presentation, Renault 1992-2007, Globalization and some doubts, Proceedings of Fifteenth GERPISA International Colloquium, "What have we learned about the dynamics of automobile firms and systems over the past 15 years ?", Paris, 20-22 june 2007. Édition numérique : freyssenet.com, 2007, 1,5 Mo, ISSN 7116-0941.

2005-200?: The compatibility problems of innovative strategy with the QCD requirements

The position of Renault: to face the early sales fall of some models, we must design and launch quickly models « that people buy ». Meanwhile we prefer to lose market share and to preserve our margin. It is also a good means to know the real preferences of the consumers.

A condition: to be able economically and socially to maintain some plants in under capacity

What does mean « what people buy » to design innovating cars models? Innovating car models require the liberty of the dimensions

The limits of the AllianceFreyssenet M., Presentation, Renault 1992-2007, Globalization and some doubts, Proceedings of Fifteenth GERPISA International Colloquium, "What have we learned about the dynamics of automobile firms and systems over the past 15 years ?", Paris, 20-22 june 2007. Édition numérique : freyssenet.com, 2007, 1,5 Mo, ISSN 7116-0941.

Évolution de la répartition en pourcentage des salariés travaillant dans les établissements de Renault selon leur statut, 1978-2006

0%

20%

40%

60%

80%

100%

1 9781 9791 9801 9811 9821 9831 9841 9851 9861 9871 9881 9891 9901 9911 9921 9931 9941 9951 9961 9971 9981 9992 0002 0012 0022 0032 0042 0052 006

année

pourcentage

CDI

CDD

Intérimaires

Prestataires(estimation)

Source: Bilan sociaux de Renault. Élaboration: Freyssenet M., 2006. Mise à jour 2007

Freyssenet M., Presentation, Renault 1992-2007, Globalization and some doubts, Proceedings of Fifteenth GERPISA International Colloquium, "What have we learned about the dynamics of automobile firms and systems over the past 15 years ?", Paris, 20-22 june 2007. Édition numérique : freyssenet.com, 2007, 1,5 Mo, ISSN 7116-0941.

Conclusion

Some interesting decisions

1. abandon of the specialisation of the plants, developing the lines flexibility

2. standardisation of components interfaces

Can Renault invent a new profit strategy?

Freyssenet M., Presentation, Renault 1992-2007, Globalization and some doubts, Proceedings of Fifteenth GERPISA International Colloquium, "What have we learned about the dynamics of automobile firms and systems over the past 15 years ?", Paris, 20-22 june 2007. Édition numérique : freyssenet.com, 2007, 1,5 Mo, ISSN 7116-0941.