Renault's global demand drags in May, reveals details of new mid-size platform with Nissan

The Renault Group's global light-vehicle sales have slumped during May. According to data published by the automaker, sales this month have dipped by 3.5% year-on-year (y/y) to 213,895 units, down from 221,692 units during May 2012. This has been made up of 202,548 passenger cars, a slide of 1.1% y/y, as light commercial vehicles (LCV) performed more poorly with a fall of 18.7% y/y to 25,020 units. The latest decline has contributed further to the falls suffered in the first quarter, and as a result the year-to-date (YTD) now stands at 1,053,824 units, down 1.6% y/y.

From a brand perspective, the core Renault marque has bore the brunt of the declines this month. The number sold has fallen 6.0% y/y to 184,236 units. While it has benefited from the introduction of the Captur sport utility vehicle (SUV), Zoe electric vehicle (EV) and fourth-generation Clio, as well as surging demand for the Duster in India and Russia, older models – particularly those in Europe – have caused a substantial drag. Another area of negativity for the group has been its South Korea-based Renault-Samsung brand. This unit's sales slid by 2.7% y/y to 4,986 units. However, its low-cost Dacia brand has shrugged off any signs of negativity as the latest-generation Sandero and new Lodgy and Dokker have resulted in a gain of 10.7% y/y to 35,800 units

The European market has once again shown how problematic it is for the French automaker. Its dependence on the region has meant that the 10.9% y/y fall suffered in May to 101,909 units has been massively influential on its performance. This fall has been caused predominantly by its domestic market, where sales retreated by 19.1% y/y to 38,471 units. It has also suffered in Germany and Spain. However, there has been some buoyancy in Italy and the United Kingdom, the latter having been helped by the introduction of Dacia brand at the start of the year.

Its important Americas region has also suffered negativity, with a fall this month of 1.1% y/y to 36,625 units. Although Brazil and Argentina have again made some minor improvement, demand has slid in Colombia while Mexico slumped over 40% y/y.

There have been improvements elsewhere though. Its Euromed Africa region increased by 2.7% y/y to 35,836 units, as improvements in Turkey, Tunisia and South Africa offset a weakness that has appeared in Algeria and Morocco this month. Its Eurasian market grew by 1.9% y/y to 20,419 units, as while growth dramatically slowed in Russia, this was offset by a massive improvement in Kazakhstan. However, the Asia Pacific market has undergone the biggest leap in demand this month as sales have improved by 24.2% y/y to 19,094 units. Despite sales in Iran more than halving this month and South Korea continuing to slide, this has been offset by its ongoing entry in to India, where the number of vehicles sold has grown ten-fold, as well as performing strongly in Greater China where it sales almost doubled.

Renault reveals new Nissan shared modular vehicle platform

Coinciding with the release of this data, Renault has revealed details of its new Common Modular Family (CMF) vehicle architecture that will be shared with Nissan and other parts of its Alliance. According to a statement released by Renault-Nissan, it has been keen to highlight the benefits of the platform which is expected to be used on five continents and underpin vehicles built in 10 countries around the world. According to the company, CMF has been designed to be to be assembled from several compatible "Big Modules" such as engine bay, cockpit, front underbody, rear underbody and electrical/electronic architecture. This will see modules become common to several platforms as part of efforts to standardise components and increase the number of vehicles per platform. Ultimately this is anticipated to generate a 30–40% average cost reduction on the entry price of models and a 20–30% reduction in parts cost for the Alliance.

CMF will gradually be rolled out into Renault and Nissan's ranges between 2013 and 2020. It will be applied to the compact and large car segments first, underpinning 11 Renaults including the next-generation Laguna, Espace and Scenic, and Nissan's upcoming replacements for the Qashqai, X-Trail and Rogue. This will eventually amount to 1.6 million units per annum (upa) of vehicles, and will be followed by models in smaller segments.

Outlook and implications

This appears to be a return to normality for the automaker, which benefited the previous month from the extenuating circumstances relating to working days and seasonality. The latest data underlines some of the difficulties that are affecting Europe and particularly the French market. Nevertheless, the severity alongside the growth in parts of the rest of the world is increasing its share of sales outside Europe to 52.3%, well in line with its target of making at least half its sales outside Europe. It will be hoping to maintain this as it continues planned investments in Russia, North Africa and India as well as looking finally to make its long-awaited entry into the Chinese market as a local vehicle producer in 2015 after being given approval for its plan by the Chinese government earlier this month.

While these expected gains take place, the automaker will nevertheless be looking to the eventual revival of the European market to play its part, as well as newly launched and soon-to-be-introduced models. While the Dacia Sandero, Renault Clio and the increasingly popular Renault Captur will play their part in 2013, the onset of new vehicles based on the CMF platform will be visible beyond this. The initial variant of this architecture, known as CMF1 under IHS Automotive nomenclature, will underpin vehicles in the C, D and E segments, while a compact CMF platform known as CMF2 will come into being at a later date, offering a variety of content levels that will allow it to form the basis of a variety of brands from Dacia and AvtoVAZ at the lower price point to Renault and Nissan at the upper end of the scale. IHS Automotive agrees with Renault's expectations for CMF1, in that it will underpin between 1.6 million and 1.7 million vehicles from 2017 onwards. However, the CMF2 platform is expected to offer even greater synergies, underpinning as many as 3 million Renault-Nissan and other partner vehicles at the beginning of the next decade. This modular thinking therefore looks set to give the Alliance greater flexibility in future with an ability to become a player in more niche segment while benefiting it from a profitability perspective, something that Renault in particular will be hoping for, given its relatively poor performance of late.