May 12, 2012

RENAULT GROUP
INVESTOR DAY, TANGIERS
May 22nd, 2012
22/05/2012
DISCLAIMER
Information contained within this document may contain forward looking
statements. Although the Company considers that such information and
statements are based on reasonable assumptions taken on the date of this
report, due to their nature, they can be risky and uncertain (as described in
the Renault documentation registered within the French financial markets
regulation authorities) and can lead to a difference between the exact figures
and those given or deduced from said information and statements.
Renault does not undertake to provide updates or revisions, should any new
statements and information be available, should any new specific events
occur or for any other reason. Renault makes no representation, declaration
or warranty as regards the accuracy, sufficiency, adequacy, effectiveness and
genuineness of any statements and information contained in this report.
Further information on Renault can be found on Renault’s web site (www.
Renault.com), in the section Finance / Regulated Information.
22/05/2012
2
Entry Program
ENTRY PROGRAM, A COMPETITIVE ASSET
Carlos TAVARES, COO
22/05/2012
ENTRY PROGRAM
What are the roots of the success ?
What is the secret recipe for worldwide success ?
Where do we stand today ?
Is this success sustainable ?
22/05/2012
4
ENTRY PROGRAM ROOTS: BACK IN 1999
22/05/2012
5
ENTRY PROGRAM ROOTS: CONFIRMED VISION BUT DIFFERENT IMPLEMENTATION
PLAN IN 2000
Modern
Dacia
1
Modern
& robust
brand
derivative
€5k
entry-level price
>700ku
per year from
2010
Excl.
Western European
markets
Pitesti
2011 RESULTS
PLAN IN 2006
production base
22/05/2012
& robust
Dacia & Renault
brands
6 derivatives
€7k to €8€ entry-level
price
>700ku per year by
2009
Worldwide
commercialization
Worldwide production
base
Modern
& robust
Dacia
& Renault
brands
7
derivatives
€7k
to €8k entry-level
price up to €20k
>800ku
in 2011
Worldwide
commercialization
Worldwide
base
6
production
ENTRY PROGRAM ROOTS: TWO BRANDS
57% of 2011 Entry sales
on the Renault Brand
A regional
brand in
Europe +
Euromed
22/05/2012
A new Renault car is affordable, safe,
respectful of the environment and of
perfect quality.
Plus it’s an ingenious product that
democratises new innovative
technology.
All passengers enjoy its convivial
spaciousness and well-being.
A Dacia car is a very affordable car
to get and to use. It's 100% useful
and generous with a unique level of
roominess in its price range.
It gives peace of mind by its
simplicity to use and to maintain
added to a high level of sturdiness
and of unbeatable reliability.
7
ENTRY PROGRAM RECIPE FOR SUCCESS: PRODUCT
The “right” level of vehicle content
High carry-over to minimize investment
Design to Cost
Manufacturing to localization
22/05/2012
8
ENTRY PROGRAM RECIPE FOR SUCCESS: LOCALIZATION IN 2011
2011
Capacity 5000h
Labor cost
RUSSIA
160ku
2.3
(base 1 = Morocco)
MOROCCO
75ku
1
ROMANIA
320ku
2
INDIA
65ku
1
COLOMBIA
71ku
3
BRAZIL
225ku
5
22/05/2012
S. AFRICA
50ku
1.5
9
ENTRY PROGRAM RECIPE FOR SUCCESS: BUSINESS MODEL DACIA BRAND
= Smart-buy =
22/05/2012
• Low dealer margin
• Low fixed marketing expenses (FME)
• No variable marketing expenses (VME)
10
ENTRY PROGRAM RECIPE FOR SUCCESS: BUSINESS MODEL RENAULT BRAND
OUTSIDE EUROPE: MID-RANGE PRICE POSITIONNING Q1 2012
700k RBL
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11
SANDERO
GOL
PALIO
25k BRL
FIESTA
SANDERO Retail Price
POLO
GRANTA
RIO
LOGAN
AVEO
NEXIA
200k RBL
PRIORA
LOGAN Retail Price
49k BRL
ENTRY PROGRAM SITUATION: TOP 15 COUNTRIES (2011)
Brazil
Russia
France
Iran
Argentina
Germany
Columbia
Romania
Italy
Morocco
Turkey
Algeria
Spain
Belgium
Ukraine
0
20
40
60
80
100
K Units
22/05/2012
12
120
140
ENTRY PROGRAM SITUATION: VOLUMES PER MODEL (2011)
Duster
180ku
Sandero
192ku
24%
22%
Stepway
90ku 11%
Logan
295ku
36%
Van 11ku 1%
MCV 39ku 5%
Pick-up 5ku 1%
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13
ENTRY PROGRAM SALES EVOLUTION – GROWING TO 1M UNITS IN 2012
IN K UNITS
~1,000
814
687
510
535
2008
2009
367
248
145
23
2004
2005
2006
22/05/2012
2007
2010
14
2011
2012e
ENTRY PROGRAM SITUATION: SOLID PROFITABILITY IN 2011
2011
18% unit sales growth achieved in 2011
Entry range achieving > 6% full cost COP in 2011
Good spread of profit by source by region & body style
2012
Capacity at the upper limit (Euromed-Africa, Eurasia and Americas)
Regional roll out of Duster (Eurasia, Americas, Asia Pacific)
Tangiers 170ku new capacity & 3 new body styles
2013
>+20% unit sales growth expected
All new models replacing current line up (Sandero, Logan, Logan MCV)
New capacity in Eurasia (AVTOVAZ) & Americas (Brazil)
Continued growth
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15
SUSTAINABLE ENTRY PROGRAM : A NEED FOR CLEARER DIFFERENTIATION
CLIO 3
SANDERO
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16
SUSTAINABLE ENTRY PROGRAM : THE NEXT PHASE OF R2016 DRIVE THE CHANGE
Entry program outlook
A “limited range”
Further geographical extension
Strict application of the Dacia business model rules
Entry = >75% of units sales growth for the Renault Group 2010 – 2013
22/05/2012
17
ENTRY PROGRAM : DOESN’T ANSWER A-ENTRY FOR EMERGING MARKETS
INDIAN MARKET MIX BY PRICE SEGMENT (TIV 2011: 2.4 m units)
30% of the Indian market under the Renault Entry range price capability
RENAULT ENTRY RANGE
Volume
in ku
900
A ENTRY
B HATCH
B SEDAN
800
RENAULT C SEGMENT
RENAULT
D SEG
KOLEOS
FLUENCE
DUSTER
700
LODGY
600
500
400
300
200
100
0
<2
2-4
4-6
6-8
8-10
10-12
12-14
14-16
16-18
18-20
Price in Lakhs
22/05/2012
18
20-22
22-24
>24
NEXT STEPS FOR THE ENTRY RANGE
ARNAUD DEBOEUF, MO PROGRAM DIRECTOR
22/05/2012
2 CARS FOR 3 DIFFERENT TYPES OF CUSTOMERS
Lodgy
Entry ticket 3 variants
= €0.5bn
Full cost COP
= Entry average
Life cycle volumes
= 1 m units
o/w Lodgy 50%
An affordable & roomy MPV for families
Dokker
An affordable and efficient combi
22/05/2012
Dokker van
An affordable and efficient minivan
20
01
LODGY
22/05/2012
21
LODGY TARGET CUSTOMER PROFILE – EUROPE
A “pragmatic and rational family”
looking for a “responsible family tool”
Family with 2 or more children living in a small city in house
Often mono-motorized
Average income
Rejecting over consumption and trends
Car is a necessity, a means of transport (price driven)
Looking for having good time in family during long trips
(holidays)
Looking for space and comfort, roominess and storage
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22
LODGY USP AND PRODUCT PROOF
USP
1
2
3
Product proof
C-Segment size MPV for the price of a B-segment
MPV
Dacia entry price < 10 000 €
Unique price/size
ratio
Interior design : modern, perceived quality improved, new
Modern MPV with
superior roominess
and attractive interior
design
dashboard
Roominess : best in class (3rd row)
Boot Capacity : best in class
Versatility simple and efficient 2/5/7 seats configuration
Storages optimization
Comfort for all : affordable technology ( touch-screen 7”
Easy to use and
comfort for the price
GPS), NVH, park assist, speed limiter,…
• Reliability
• Sturdiness
• Durability
Dacia Fundamentals
22/05/2012
23
LODGY MARKET COVERAGE
Lodgy an international project
Tangier plant (Morocco) covering many destinations
Volumes
Volumes (Tangier
(Tangier plant)
plant)
>> 80.000
80.000 veh.
veh. in
in 2013
2013
Europe:
Europe: 92%
92% of
of sales
sales
Morocco (Tangier) plant
SOS Apr’12
_________________________
Dacia badging
for Europe & Euromed
+ Africa markets with Renault
badging
America
under study
Asia
under study
____________________
___________________
Renault badging
Brazil
Argentina
Renault badging
India
Indonesia
22/05/2012
24
DOKKER - TARGET CUSTOMER PROFILE - EUROMED
« THE SMALL COMPANY OWNER
WITH A MIXED USAGE »
(work and family)
• Craftsmen, storekeepers, small business
owners
• Not very faithful, buy more than average
second-hand vehicle
• Small fleet (2-3)
• Urban, Intensive, frequent mixed usage
• Buy the cheapest that satisfies needs: load
dimensions, payload, accessibility, sturdiness
& versatility (work & family)
• Choice criteria: Load dimensions, Price/tax
system, Consumption, Reliability/durability
22/05/2012
25
DOKKER - USP AND PRODUCT PROOF
Product proof
USP
- Boot capacity : 800 L - best capacity on the
market - up to 3 m3
- Boot Load length : 1.160 mm (BIC)
- Sliding doors opening width: 703 mm-BIC
- Versatility : pocket folding seats + flat floor
Load dimensions
(mixed usage)
- The less expensive 3 m3 combi
=>Entry price < 10.000€
- A 3m3 combi at the same price as 2,5 m3
Price
Basics
- K9K 75 hp and 90 hp: 118 g CO2
- H5Ft 145 g CO2 – Gazoline BIC
Consumption
- Renault LCV requirements for Body and
Underbody (300.000 km)
Reliability
22/05/2012
26
DOKKER VAN - TARGET CUSTOMER PROFILE – EUROPE / EUROMED
« THE CONSTRAINED CRAFTSMAN »
looking for a practical and affordable tool
• Craftsmen, storekeepers, small business
owners
• Not very faithful, buy more than average
second-hand vehicle
• Small fleet (1 to 4 LCV) with intensive
usage
• Buy the cheapest that satisfies needs: load
dimensions, payload, accessibility, sturdiness
& road-handling
• Choice criteria: Load dimensions, Price,
Consumption, Reliability/durability
22/05/2012
27
DOKKER VAN - USP AND PRODUCT PROOF
Product proof
USP
- 3.3 m3 up to 3.9 m3 - BIC
- Load length 1900 mm up to 3050 mm
Sliding doors opening width: 703 mm - BIC
- Payload 750kg - BIC with New Doblo
Load dimensions
- The less expensive “3 m3”
=> Entry price < 8.000€
- 3m3 at the price of 2.5 m3
Price
Basics
- K9K 75 hp and 90 hp: 118 g
- H5Ft 145 g
Consumption
- Renault LCV requirements for Body and
Underbody (300.000 km)
Reliability
22/05/2012
28
02
LOGAN & SANDERO RENEWAL
22/05/2012
29
X52 IS LIKE LOGAN…
Low cost
Same cost but with new regulations (ESP, Euro 5, EuroNCAP new rating ...), design
improvement and basic feature increase (CO2, NVH ...)
Roomy
3 adults at the rear with their luggage: large rear bench, rear knee radius and rear height
under roof + 510 l boot.
Reliable and robust
« robust » styling, high ground clearance, warranty
Entry ticket management
X52 = new Logan
B = hatch
L = sedan
R = estate
-40% L/B/R52 vs. L/B/R90 in Romania
22/05/2012
30
… BUT X52 IS MORE THAN LOGAN FOR THE SAME PRICE
Global design from the beginning to adapt to local requests:
RHD, gradewalk (chrome, colour ...), feature offer (speed limiter, Medianav ..) is
increased to fit to customer request.
Enhanced exterior styling
“My car indicates my social status. Other people don’t know anything about me, but my car can help them
to create an image of me”
Robust and roomy + Modern and statutory
Enhanced interior styling
Instrument panel, trims, colours for modernity
Improved Total Cost of Ownership
Up to date engines, maintenance plan and resale value.
Improved NVH
22/05/2012
31
MANUFACTURING COST LOGAN
Enrichment
Purchasing
negotiation
Added
value
Regulatory
cost
Design
to cost
Raw
materials
CURRENT LOGAN
NEW LOGAN
22/05/2012
32
03
KNOW-HOW
22/05/2012
33
RIGHT SIZING
Product definition
3 principles:
Price is set upstream as a « must be » whatever the product
planning demands
FEW clear and focused USP + Brand basics, that’s all !
Every feature costs lower than its value.
Keeping in mind
International before Europe (Local usage, regulations ...)
22/05/2012
34
FULL BUSINESS MODEL: ALL COSTS UNDER PRESSURE
100%Average
Project
Commercial expenses
Powertrain depreciation
75%
Other
Entry ticket depreciation
50%
Warranty
Transportation
25%
Production costs
Outsourced parts & powertrain
0%
CURRENT LOGAN
22/05/2012
CLIO 2
35
CARRY-OVER
MPV: lateral doors, tailgate,
longer, lower
Hatch
Legend:
Lodgy specific
Dokker specific
Common parts
Combi: sliding door, rear
doors, higher, shorter
Asymmetrical doors
1,814 m
1,682 m
13,2 cm
Sliding
doors
(without roof rail)
(5 seats, without
roof rail)
4,363 m
4,498 m
13,5 cm
22/05/2012
36
CARRY OVER: REAR AND FRONT AXLE
Strong front and rear axles for all uses:
Rear axle from Kangoo
Advantages: comfort, robustness,
improved load width
Front axle from current Logan MCV
Advantages: costs, robustness,
implementing the Logan know-how
22/05/2012
37
DESIGN TO COST
carry-over
new parts
NEW LOGAN
LOGAN
22/05/2012
38
EUROMED-AFRICA REGION
JEAN-CHRISTOPHE KUGLER,
CHAIRMAN EUROMED-AFRICA REGION
22/05/2012
EUROMED-AFRICA IN 2011 : A VERY SPECIFIC REGION…
TIV :
2.3 m (3.1% global TIV in 2011)
SALES : 346 ku (12.7% Group sales)
MANUFACTURING : 698 ku (26% of the Group total)
EMPLOYEES :
28.5 k (22% of the Group total)
MAIN MARKETS :
Tier 1 : Turkey, Algeria, Morocco, Romania,
Tier 2 : Overseas French departments, South Africa, Tunisia, Egypt
Tier 3 : Bulgaria, Libya, Nigeria, other African countries
22/05/2012
40
2011 SALES
346 ku sold in 2011 (+12.5% vs +7.5% for TIV)
Group M/S: 14.8%
245k
71%
101 k
29%
Top 5 selling models in the region
K units in 2011
Symbol
(sedan)
74
Logan
(sedan)
65
Fluence
(sedan)
36
Kangoo
(PC+LCV)
36
Duster
(SUV)
29
22/05/2012
41
RENAULT BRAND IS LEADER IN THE REGION
SALES PER BRAND IN THE REGION
Brand
Units in 2011 *
Renault
211
Ford
157
Fiat
142
VW
122
Hyundai
108
Dacia
97
Peugeot
90
Toyota
74
Opel
63
Chevrolet
55
* Euromed excl. Africa
22/05/2012
42
EUROMED-AFRICA REGION : LEADING COMMERCIAL POSITIONS
ROMANIA
39,600
37.3%
Country
Unit sales in 2011
M/S % in 2011
2
1
BULGARIA
3,100
14.0%
3
2 1 3
MOROCCO
TURKEY
41,500
37.0%
2
1
141,000
16.3%
3
2
1
3
ALGERIA
75,000
25.3%
2
1
S. AFRICA
10,500
2.3%
3
22/05/2012
43
EUROMED-AFRICA : A CENTRAL KEY POSITION FOR THE GROUP
A complex flow management (plants, suppliers, markets, Alliance)
70% of the production exported
Sales: 83% “made in the region”
EUROPE
EURASIA
15%
1%
61%
70%
83%
83%
30%
EUROMEDEUROMED
AFRICA
8%
ASIA-AFRICA
ASIA-PACIFIC
ASIA-AFRICA
2%
AMERICAS
ASIA-AFRICA
Production (CBU) % (from Euromed to )
Sales % in Euromed (from )
CKD main flows from Euromed to 22/05/2012
44
INDUSTRIAL / MANUFACTURING
Models manufactured : 3 « blockbusters »
Pitesti
DUSTER
168 ku
CLIO III
95 ku
Bursa
SYMBOL
83 ku
Tangier
Casablanca
2002 – 2011 : manufacturing volumes in ku
686
516
563
698
615
439
362
Rosslyn
292
158
2002
205
2003
2004
2005
2006
2007
22/05/2012
2008
2009
2010
2011
45
Pitesti
INDUSTRIAL / MANUFACTURING
Bursa
Vehicles (Bursa, Casablanca, Pitesti) :
Tangier
Casablanca
698 ku new cars (without Tangier)
+ Rosslyn Nissan plant
Parts :
512 ku engines
868 ku gearboxes
+ miscellaneous (engine subframes…)
Rosslyn
2014 manufacturing capacity over 1.1 Million (harbour base)
22/05/2012
46
ENGINEERING & DESIGN – 2,500 EMPLOYEES
Renault Technological Romania
Renault Design Central Europe
Titu prototype track (Romania)
22/05/2012
47
COMPETITIVE ADVANTAGES
Ro
ma
ni a
M
or
oc
co
ey
Tu
rk
Ru
ss
ia
Po
rtu
ga
l
Sl
ov
en
ia
az
il
Br
Sp
ain
Ko
re
a
S.
Fr
an
ce
Labour cost
Local supplier integration (53% -> 70%)
Region’s master engineering center localized in Romania
Strong relationships with local authorities
83% of Euromed sales manufactured in Euromed-Africa factories
22/05/2012
48
Renault Group in Morocco
Tangiers Project
MICHEL FAIVRE-DUBOZ
RENAULT MOROCCO DIRECTOR
22/05/2012
01
RENAULT GROUP IN MOROCCO
22/05/2012
50
MOROCCO: KEY FIGURES
Population:
33 million inhabitants, 55% urban
GDP:
$92bn (Algeria: $159bn, Egypt: $217bn, Turkey: $729bn)
Growth Rate average:
+ 6.5% (2011: 4.5%)
Unemployment Rate:
9.1% overall, 14% in urban areas
Minimum Wage:
10,64 MAD/h ~ 1€ (10% increase as per July 2011)
Average Moroccan salary: 4000 MAD/month (~ 360 €/month)
Illiteracy:
7% in urban areas, > 30% in rural areas
Currency exchange rate : 11.2 MAD for 1€
22/05/2012
51
RENAULT IN MOROCCO
Renault’s presence dates back to 1928
head account : 5,600 in 2011 9,000 by 2014 (Tangiers growth)
Somaca (1962)
1 branch, 19 Dealers
M/S: 37% in 2011, 42% in April 2012
Tangiers (2012)
Dacia 1st Brand, Renault: 2nd Brand
22/05/2012
52
02
TANGIERS PROJECT
22/05/2012
53
TANGIERS, A STRATEGIC CHOICE
Tangiers locations in the Gibraltar straight
14 KMS
14 km from the Spainish coast
1.5 days by boat from France
Tanger-Med free zone port
40 kms from Tangier, one of the most important
container ports in the world
Direct access from the plant by train
22/05/2012
54
A STRATEGIC SITUATION WITH STRONG ADVANTAGES
Melloussa Free
Zone
(30 km from Tangier
Parts localization /
nearby suppliers
Competitive wages
Med port)
22/05/2012
55
Tanger Med port
facilities
(export)
TANGIER PLANT : A GREAT PROJECT
Production
capacity
340 000
Veh/y
Investment
1 160 M€
Employment
created *
Surface
> 6,000 in plant
+ 30,000 indirectly
280 Ha
New « low cost » production site creation
New product launches, mainly for exportation
Moroccan automotive suppliers development
* Plant revenues will amount around ~ 10% of total Moroccan exports (2011)
22/05/2012
56
TANGIERS PLANT : A GREAT PROJECT
First green field plant for the Renault Group since Brazil in the 90’s
Manufacturing cost <400€/unit excl. depreciation
4,800 blue collar employees
1,470 white collar employees
Training center inaugurated in March 2011
First automotive plant carbon free and « zero industrial water waste »
Supplier base in development
3 new vehicles bodies on the Entry platform
Alliance Production Way
Same level of competitiveness as Pitesti (Romania)
22/05/2012
57
FINANCING SCHEME
CDG
Renault SAS
47.6%
52.4%
RTM
(Assets)
Assets (capacity
investments, tools,
engineering) structure
22/05/2012
Rent
100%
RTE
(Operations)
Operations structure
58
INDUSTRIAL SCHEME : A FULL VEHICLE PRODUCTION PLANT
> 2,500 employees
in March 2012
Stamping shop
Body shop Components
(internal & external)
Paint shop
Trim shop
Coils of Steel
Production capacity ≈ 30 jph in 2012/13, ≈ 60 jph end of 2013
Alliance Production Way
22/05/2012
59
ENTRY TICKET REDUCTION THROUGH CARRY OVER
Carry over savings achieved mainly for the 3 lines of the stamping shop
Example Line 01
from Sandouville (in
activity since 1975)
22/05/2012
60
PLANT SCHEME
Reserved for Nissan
Phase 1 30 vh/h (2011)
Phase 2 60 vh/h (2013)
22/05/2012
61
UPSTREAM FLOW
Spain
Italy
Portugal
France / Germany
Great Britain
Algesiras
Port
Romania ILN
Turkey ILN
West EUROPE
15 trucks / day
TANGER Free
Zone suppliers
(30 kms)
Long distance flows
13 containers/ day
52 trucks / day
Tétouan (30 kms)
Casablanca (400 kms)
22/05/2012
62
ILN/PCC
India, China,
Thaïland, South
Korea
DOWN STREAM FLOW
Finland
Port
Importation center
Direct distribution
Norway
Swed
en
Estoni
a
Lettonie
Denmark
Litva
ZEEBRUGGE
(4w)
German
y
Tche
LE HAVRE (3w)
Fran
ceSETE (2,2w) KOPER (6w)
Poland
Slovaki
a HungarRomania
y
LIVOURNE
(5w)
Spain
Portugal
BARCELONA
(1,5w)
Italy
Turkey
GEMLICK
(7,5w)
train
Plant
Tanger Med
Weekly departures
22/05/2012
63
A LOCAL SUPPLIER BASE….
Morocco
Number of Suppliers
Buy %
18
48%
TANGIER
8 Greenfields
3 Brownfields
1 SOMACA supplier
KENITRA
1 Greenfield
CASABLANCA
1 Brownfield
4 SOMACA suppliers
22/05/2012
64
… THAT WILL RAMP UP
Local integration = 48% at SOP, excluding powertrain and in-house manufactured
parts (seats, axles and exhaust system assembly, bumpers paint etc.).
25%
18%
25%
HCC
LCC
MOROCCO
27%
48%
2012 VISIBILITY
22/05/2012
57%
2015 OBJECTIVE
65
PROJECT PLANNING
2008
Master
agreement
2009
Financial crisis
First stone
22/05/2012
2010
First rod
2011
IFMIA, first car
66
2012
Inauguration
Production
start
OVERVIEW
Spain
Gibraltar straight
Renault Nissan Tangiers Plant
22/05/2012
67
LODGY MANUFACTURING APPROVAL
January 27th 2012
22/05/2012
68
DOKKER VAN
22/05/2012
69
DOKKER
22/05/2012
70