Renault SA: history, ownership, mission, how it works & makes money

Renault SA: history, ownership, mission, how it works & makes money

FR | Consumer Cyclical | Auto - Manufacturers | EURONEXT

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A Brief History of Renault SA

Founded in 1899, Renault SA has grown from a small automobile manufacturer to one of the largest car manufacturers in the world. The company was established by Louis Renault and his brothers Marcel and Fernand, producing their first vehicle, the Renault Voiturette, in 1900. By 1907, Renault had developed a strong presence in motorsports, significantly boosting its brand recognition.

During World War I, Renault adapted its production to meet military needs, producing vehicles such as the Renault FT tank, which played a crucial role in the war. Post-war, the company expanded its model lineup and entered international markets, notably in the United States and South America.

In 1945, Renault was nationalized by the French government after World War II. This period saw a significant focus on mass production, epitomized by the launch of the Renault 4CV, which became a symbol of affordable mobility. The 1960s marked a major growth phase as Renault expanded its global footprint and introduced successful models like the Renault 8 and 10.

The 1980s and 1990s brought challenges, including financial difficulties and changing market dynamics. In response, Renault formed strategic alliances, notably with Japanese manufacturer Nissan in 1999, establishing the Renault-Nissan-Mitsubishi Alliance, which remains a powerful automotive group.

As of 2022, Renault reported a revenue of €46.2 billion, with a net income of €1.7 billion. The company sold approximately 1.5 million vehicles globally that year. In 2023, Renault announced ambitious plans to transition to electric vehicles (EVs), targeting 65% of its sales to be EVs by 2030.

Year Revenue (€ billion) Net Income (€ billion) Units Sold (million) Electric Vehicle Sales (% of total)
2022 46.2 1.7 1.5 10
2021 46.0 0.8 2.7 8
2020 43.5 -8.0 2.3 6
2019 55.5 0.5 3.8 4

Renault’s commitment to sustainability is evident through its investment in electric vehicles, with plans to launch a range of new EV models, including the Renault 5, which is set to be available by 2024. The company's goal is to be carbon neutral by 2040.

As of October 2023, Renault's market capitalization stood at approximately €11 billion. The company trades under the ticker symbol RNO on the Euronext Paris exchange. The stock price has shown a volatile trend over recent years, reflecting broader market conditions and sector-specific challenges, including supply chain disruptions.

Renault’s corporate strategy focuses on enhancing operational efficiency, digital transformation, and expanding its presence in emerging markets. The company's R&D investment reached €2.1 billion in 2022, underscoring its commitment to innovation and technology-driven growth.



A Who Owns Renault SA

Renault SA, a prominent player in the global automotive industry, has a diverse ownership structure. As of late 2023, Renault's largest shareholder is the French government, which holds approximately 15% of the company's shares. This stake underscores the strategic interest of the government in the automotive sector, particularly in promoting domestic manufacturing.

Another significant shareholder is the Nissan Motor Co., Ltd., which owns a 15% stake in Renault. This relationship stems from the longstanding alliance between Renault and Nissan, initiated in the late 1990s. The collaboration aims to leverage synergies and share technological advancements between the two automotive giants.

Furthermore, the investment company called FIR Capital holds around 13% of Renault’s shares. FIR Capital is known for its investments in various sectors, including automotive, and this stake indicates a commitment to Renault's long-term growth strategy.

Institutional investors also play a crucial role in Renault’s ownership composition. As of the latest reports, institutional shareholders collectively own about 60% of the company's shares, reflecting broad confidence in Renault's performance and future prospects.

Shareholder Ownership Percentage Type
French Government 15% Public Entity
Nissan Motor Co., Ltd. 15% Corporation
FIR Capital 13% Investment Company
Institutional Investors (collectively) 60% Various

In addition to these key stakeholders, individuals and smaller investment firms also own shares in Renault, contributing to a more fragmented ownership structure. The balance of shares is held by retail investors and minor institutional players, making the company accessible to a broad range of investors.

As we delve deeper into Renault's financial profile, the company's market capitalization is approximately €15 billion as of October 2023, with a share price hovering around €35. This valuation represents a recovery in market sentiment following the challenges faced in the automotive sector during previous years, particularly from supply chain disruptions and changing consumer preferences.

Overall, the ownership of Renault SA is characterized by a mix of government influence, strategic alliances, and institutional investor confidence, reflective of its pivotal role in the global automotive market and the broader economy.



Renault SA Mission Statement

Renault SA, a global automobile manufacturer, has a mission statement that emphasizes innovative mobility solutions and sustainable development. The company aims to create value for its customers and stakeholders by focusing on electric and hybrid vehicles, enhancing connectivity, and promoting environmentally friendly practices.

As of 2023, Renault has set ambitious goals in alignment with its mission. The company is committed to achieving 30% of its sales from electric vehicles (EVs) by 2025. In 2022, Renault's EV sales accounted for 10% of total sales, demonstrating significant growth potential in this segment.

Renault's strategic focus also includes a commitment to carbon neutrality by 2040. This initiative aligns with global trends towards sustainability and reducing carbon footprints in manufacturing and vehicle production. The company has invested approximately €10 billion in electric technology and infrastructure from 2021 to 2026.

The following table provides an overview of Renault’s financial performance and strategic initiatives as they relate to its mission statement:

Metric 2021 Financials 2022 Financials 2023 Goals
Total Revenue €46.2 billion €38.5 billion €40 billion
Net Profit €1.3 billion €1.0 billion €1.5 billion
Electric Vehicle Sales 93,000 units 137,000 units 200,000 units
Investment in EV Technology €1 billion €2 billion €3 billion
Carbon Emissions Reduction Target (by 2025) -25% -30% -50%

Renault is also focused on enhancing customer experience through digitization and smart mobility solutions. The mission statement reflects its intent to leverage technological advancements to meet evolving consumer demands. In 2023, Renault aims to increase its connected vehicle offerings to represent 70% of new models launched.

The strategic emphasis on sustainable development is also evident in Renault's partnership with other industry stakeholders to create a circular economy for electric vehicle batteries. In 2022, Renault announced plans to recycle up to 95% of battery components by 2030, supporting its sustainable mission.

Renault's mission is further reflected in its diversity and inclusion initiatives, with a target to increase the percentage of women in leadership positions to 30% by 2025. This commitment not only promotes equality but also enriches the company's talent pool, enabling innovative thinking and strategies in the automotive industry.



How Renault SA Works

Renault SA, a prominent player in the automotive industry, operates through a well-structured business model that encompasses manufacturing, marketing, and sales of vehicles across various segments. The company is headquartered in Boulogne-Billancourt, France, and is a member of the Renault-Nissan-Mitsubishi Alliance, which enhances its global reach and operational efficiencies.

Business Segments

Renault's operations are categorized into three main business segments:

  • Automobiles
  • Financial Services
  • Other Businesses

The automobiles segment is the core of Renault's operations, providing a diverse range of vehicles including passenger cars, light commercial vehicles, and electric vehicles (EVs). Financial services enable customers to finance their vehicle purchases, enhancing sales and customer loyalty.

Recent Financial Performance

As of the third quarter of 2023, Renault reported the following financial metrics:

Metric Q3 2023 Q3 2022
Revenue (€ billion) 11.5 10.4
Operating Profit (€ billion) 1.2 0.9
Net Profit (€ billion) 0.8 0.6
EBITDA Margin (%) 10.4 9.0

Renault’s revenue growth of 10.6% year-over-year in Q3 2023 indicates the company's strong recovery and effective strategies post-pandemic. The operating profit margins improved due to cost-control measures and a favorable product mix.

Global Reach and Market Position

Renault operates in over 130 countries and has a significant presence in Europe, Latin America, and Asia. The company was the 4th largest automobile manufacturer in Europe in 2022, holding around 7.5% market share.

Electric Vehicle Strategy

Renault is a leader in the electric vehicle market, with the Renault Zoe being one of the best-selling EVs in Europe. In 2023, Renault announced plans to invest €2 billion in electric vehicle technology and infrastructure by 2025, aimed at producing a range of new EV models and improving battery technology.

Research and Development (R&D)

In 2022, Renault invested approximately €1.2 billion in R&D, focusing on sustainable mobility, electric mobility solutions, and autonomous driving technologies. The company aims to launch 10 new electric models by 2025 as part of its electrification strategy.

Supply Chain and Manufacturing

Renault's manufacturing footprint includes 14 major production sites worldwide. The company emphasizes sustainability and efficiency in its supply chain, adopting practices such as circular economy and green manufacturing processes.

Stock Performance

As of October 2023, Renault's stock (RNO.PA) is trading at approximately €37.50 per share, reflecting a year-to-date increase of 15%. Market analysts have a consensus rating of "Hold" for the stock, given the ongoing developments in the automotive sector.

Renault has a market capitalization of around €10 billion, with an anticipated P/E ratio of 8.5 for the fiscal year 2023, indicating a valuation that may appeal to value investors.

Conclusion

Renault SA's robust operational framework, combined with its strategic focus on electric vehicles and global market expansion, positions it favorably within the competitive automotive landscape. The company's strong performance metrics and investment in innovation underline its commitment to sustainable growth and customer satisfaction.



How Renault SA Makes Money

Renault SA derives its revenue primarily from the manufacturing and sale of automobiles. The company operates in multiple segments, including passenger cars, light commercial vehicles, and electric vehicles. In 2022, Renault reported total revenue of €46.2 billion, marking a significant increase from €46.0 billion in 2021.

Sales of vehicles are the backbone of Renault's business model, contributing approximately 90% of total revenue. In 2022, Renault's vehicle sales reached around **1.5 million** units globally. The breakdown by region showed that Europe remained the largest market, accounting for over **57%** of total sales, followed by other regions including North Africa and Asia.

The company has also focused on expanding its electric vehicle (EV) offerings. In 2022, Renault sold **146,000** electric vehicles, capturing a **15.4%** market share of the EV segment in Europe. The ZOE model has consistently been one of the best-selling EVs, contributing substantially to overall sales with over **400,000** units sold since its launch.

Segment 2022 Revenue (€ billion) Percentage of Total Revenue Vehicle Units Sold (2022)
Passenger Cars 40.5 87.6% 1,300,000
Light Commercial Vehicles 4.5 9.7% 200,000
Electric Vehicles 1.2 2.6% 146,000

Additionally, Renault has been investing in partnerships and alliances to enhance its global footprint. The Renault-Nissan-Mitsubishi Alliance has enabled Renault to leverage shared technologies and platforms, leading to cost savings in production. This strategic alliance contributed to a combined revenue of **€81 billion** in 2022 across the group.

In terms of geographical revenue distribution, Renault reported that **65%** of its sales came from Europe, while the remaining **35%** was generated from international markets including Latin America, Africa, the Middle East, and Asia.

Renault's financial health is further illustrated by its profitability margins. In 2022, the company recorded an operating profit of **€1.3 billion**, which translates to an operating margin of approximately **2.8%**. This operating profit reflects the company's efforts in cost management and efficiency improvements despite a challenging market environment influenced by supply chain disruptions.

Furthermore, Renault has committed to sustainability and intends to invest **€1.5 billion** in its electric vehicle lineup by 2025, aiming to launch several new models, thereby enhancing its revenue potential in the growing EV market.

Overall, Renault's diverse portfolio, strategic alliances, and focus on electric vehicles position the company to navigate the evolving automotive landscape effectively while maximizing profitability across its various segments.

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