Renault is one of the top two car and light commercial vehicle brands in Western Europe, but until recently it had only a minimal presence outside that region. However, in a few key deals since 1999, Renault has transformed itself into a global force with substantial operations in Asia and a foothold in North America. Where once there was only the Renault brand, the group now controls Japanese marque Nissan, as well as Dacia in Eastern Europe and Samsung Motors in Korea. In 2007, the group agreed an important strategic partnership with Russian manufacturer AvtoVaz, which gave Renault effective management control of the widely known Lada car brand. In 2010, Renault agreed a global cooperation partnership with Daimler, covering small cars and light commercial vehicles. Since then though, like all mass-market auto manufacturers, and especially those over-exposed to the struggling European market, Renault suffered steep falls in sales, before finally scraping a recovery in 2014. It further bolstered its footprint by taking control of another Japanese manufacturer, Mitsubishi Motors, in 2015.
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Adbrands Daily Update 7th Feb 2019: The tide may be turning in France against Carlos Ghosn, still under arrest in Japan on allegations of fraud brought by Nissan. Renault has until now given its full support to its beleaguered former CEO. However, the company said today that it has found evidence that Ghosn may have misused corporate funds to pay for his own private party in in 2016 at the palace of Versailles under the cover of a wider sponsorship agreement with Renault.
Adbrands Daily Update 24th Jan 2019: With no immediate end in sight to his detention by Japanese prosecutors, Carlos Ghosn resigned as chairman & CEO of Renault. The board confirmed Thierry Bolloré as CEO and co-opted Jean-Dominique Senard, also CEO of tiremaker Michelin, to become chairman of Renault. Senard is tasked with rebuilding bridges with Nissan and Mitsubishi and will lead negotiations concerning the future of the Alliance.
Adbrands Weekly Update 22nd Nov 2018: How are the mighty fallen! The global alliance between French carmaker Renault and its Japanese partner Nissan has come under intense pressure after Carlos Ghosn - one of the global auto industry's most admired leaders, CEO of Renault, chairman and former CEO of Nissan and architect of their alliance - was arrested in Tokyo on allegations of securities fraud. Japanese prosecutors allege that Ghosn received compensation worth the equivalent of around $89m from Nissan over a period of five years, but declared only around half of that amount in official filings. If found guilty he could face up to ten years in prison and a fine equivalent to all the money he received. Nissan also accused Ghosn of "numerous other significant acts of misconduct... such as personal use of company assets". Arrested at the same time was senior Nissan director Greg Kelly, who prosecutors claim assisted in the alleged deception. Both men are being held in an undisclosed location in Tokyo, and are likely to be detained until at least the end of next week. Nissan said a secret internal investigation had been launched earlier this year following the receipt of information from a company whistleblower. Its board convenes today to formally remove Ghosn and Kelly from their roles. Renault's board, though, are so far standing firm. They have retained Ghosn as both chairman & CEO pending their own investigation, but elevated Ghosn's deputy Thierry Bolloré to interim CEO in his absence. A Renault board statement was somewhat non-committal regarding the allegations. "The board is unable to comment on the evidence seemingly gathered against Mr Ghosn by Nissan and the Japanese judicial authorities." It has requested to see all the evidence for its Japanese partner's claims. Nissan managers are known to have bristled in recent years at Ghosn's increasingly autocratic style, and also the leading role played by the French government in their alliance. The French state is the biggest shareholder in Renault, which is in turn the biggest shareholder in Nissan. The aggressive stance taken by the Japanese company over Ghosn would appear to bode ill for the future of the alliance, in its current form at least. (See Nissan for further developments).
Adbrands Weekly Update 15th Nov 2018: Renault named Francois Renard as global marketing director. He joins the group after a long career at Unilever. He succeeds Thierry Koskas, who has transferred to the position of president, Renault Sport Racing.
Adbrands Weekly Update 4th Oct 2018: In a bold new experiment, Renault is driving the creation of a new agency model combining teams from its global creative agency Publicis and media agency OMD. The new entity, as yet unnamed, will be led by a Renault-selected COO, and will house a team of the carmaker's own marketing executives. Bastien Schupp, Renault's VP for brand strategy & marketing, said it was the only viable alternative to taking the business inhouse. "I don't want to have to discuss the creative and the media separately," he told The Drum. "I want one agency that brings content, media, data and the client around one table. We could do it ourselves, not just source the [creative] idea but produce and on the media side, anything that's not hardcore traditional media buying, we could go direct and set up our own programmatic desks. We could get rid of most of our agencies and go in-house. But I don't think it's realistic. We're a traditional car company and it's not our core know-how. We wouldn't hire the right people and even if we did I don't think we would manage to keep them – over time we can't offer them the career that marketing specialists need." The experiment will launch in France, and if successful will be rolled out to the Latin American and Asia Pacific markets. P&G is arguably the pioneer of this sort of cross-group marketing hybrid, with its "People First" unit in New York that combines staff from Publicis-owned Saatchi & Saatchi, WPP's Grey and Omnicom's Hearts & Science and Marina Maher Communications to support Tide and other detergent brands.
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Free for all users | see full profile for current activities: In 1998, Renault celebrated its 100th anniversary with a procession of more than 650 historic Renaults through Paris. A century earlier, the 21 year-old Louis Renault astonished a family friend by driving a three-wheeled "voiturette" that he had built himself from scratch up a steep hill in the city's Montmartre district. The friend was so amazed that the vehicle could manage the slope that he ordered one the same day. By the end of the day, Renault had a further 12 orders. With backing from his brothers Fernand and Marcel, Renault Freres was set up in 1899, and was turning out 70 cars a year by the beginning of the new century. The key to Renault's designs, and to the success of his business, was his patented direct drive transmission, quickly adopted by all other manufacturers.
Marcel and Louis reinforced the success of their cars by winning a series of well-publicised contest races (although Marcel was killed in a 1903 crash). In 1905, the fledgling business won a bulk contract to supply Paris taxis, and the company really took off. Manufacturing bases were quickly established in the UK, Germany and the US, and the company exported its vehicles as far afield as Tokyo, Buenos Aires and St Petersburg. In 1908, Renault diversified into aircraft manufacture, and the following year Louis bought out the business from his surviving brother Fernand, absorbing Renault Freres into the newly formed Societe des Automobiles Renault (SAUR).
In 1914, with the outbreak of the First World War, Renault left its mark on French history when 1,200 Paris taxis were requisitioned to transport soldiers to the front at Marne, where the allies won their first victory against Germany. Later, Renault turned its hand to tanks and shells. By 1919, Renault was France's biggest private industrial company. But in the economic devastation which followed the war, Renault was quickly overtaken by American manufacturers who set up new bases in Europe. In response, Renault widened its range to produce everything from budget models to limousines.
The Second World War proved a catastrophe for the company. During the German occupation of France, the Renault factory was placed under the control of Daimler Benz, although Louis Renault remained as manager. Repeatedly bombed by the allies, the plant was almost completely destroyed in 1944. Renault himself was arrested in September 1944 by the invading allied forces for collaborating with the Nazis. He died in prison a month later, and his estate was confiscated.
After the liberation of France, Renault was nationalised and quickly regained the substantial ground lost during the war. By 1952 the company was turning out 100,000 vehicles a year, then 500,000 by the mid-1960s as sales took off in the US and around Europe. The company was famed for its small affordable cars, typified by the Renault 4 in the 1960s and the Renault 5, launched in 1972, which went on to be one of its best-selling models ever.
In the 1970s, Renault set its sights on the American market, buying a small stake in ailing US manufacturer AMC, and negotiating a cooperation deal with truckmaker Mack in 1979. The following year, Renault took effective control of AMC, which began to manufacture the Renault 9 and Renault 11 for the American market, renamed the Alliance and the Encore. In 1983, the company took over Mack as well. By this point, the US had become Renault's biggest export territory. However, the cars failed to take off with American consumers, particularly in the face of strong competition from Japanese models. By the mid-1980s, Renault was generating huge losses in North America, with group debt reaching a colossal 57bn French Francs in 1984. Some welcome good news came with the successful launch in Europe of the Espace, effectively the first modern MPV, in partnership with industrial group Lagardere.
To resolve Renault's financial problems, new chief executive Georges Besse instigated a huge restructuring in 1985, shedding 21,000 staff, and selling off smaller non-core subsidiaries. But the company's troubles escalated when Besse was murdered the following year by terrorist group Action Directe. Restructuring continued under successor Raymond Levy, who took the tough decision to sell the AMC stake to Chrysler and effectively pull out of North America in 1987. Car rentals business Europcar was sold to hotel group Accor the same year, and Renault was able to report record profits by 1988. During the 1990s, as a result of problems in its trucks division, Renault began a close liaison with Sweden's Volvo. Substantial share-swaps between the two companies were the prelude to full merger, but the plan was eventually vetoed in 1993 by the Swedish company's shareholders, who feared that their interests would be overshadowed by the French giant. In 1996, the French government privatised Renault, although it retained a 46% stake. That year the group made a loss as a result of restructuring and the sale of its holdings in petrol station chain Elf Aquitaine and Volvo cars.
Despite its occasional international interests, Renault was to all intents and purposes a European manufacturer in 1998. Then ranked 10th worldwide by sales, almost a third of the company's vehicles were generated in France, with Western Europe as a whole contributing 83% of sales. It was time for a change. In 1999, Renault leapt back into the global market as the white knight to rescue struggling Japanese carmaker Nissan. Much bigger than Renault, Nissan was then the world #6 by unit sales. But the Japanese company was struggling under the burden of declining market share and a huge debt, estimated at up to $21bn. Renault offered to buy a 35% stake in Nissan for around $6bn. The French company took effective control of the business, installing its own senior management team in a bid to turn around this drifting giant.
Not content to stop there, a few months later Renault acquired the Romanian government's 51% stake in Dacia, that country's biggest auto manufacturer, for around $50m. (The stake was increased to 73% in 2000, then to 92% in 2001). Another piece in the eastern European jigsaw was slotted into place with the agreement of a deal between Irisbus, a joint venture formed by Renault and Fiat's Iveco subsidiary, to acquire a controlling stake in struggling Hungarian busmaker Ikarus. (Renault was later obliged by regulators to sell its stake in Irisbus to Fiat). In 2000, Renault consolidated its position in Asia with the takeover of Korea's failed Samsung Motors. Renault had been negotiating for some months with the car business's parent, Samsung Group, attempting to resolve the question of the Korean company's substantial debts. They finally settled on a price of around $560m for a 70% stake in the Korean car company. The Samsung group retained a 20% stake, while creditors took 10%. The deal made Renault the first foreign car company to break into the hitherto protected South Korean market.
At the same time, Renault pulled out of the trucks business, selling its entire trucks division, including Mack and Renault VI to Volvo for €1.7bn ($1.6bn). Under the terms of the deal Renault also took a 20% shareholder in Volvo. In 2001 Renault and Nissan strengthened their alliance when Nissan agreed to acquire a 13% stake in the French company (now 15%), while Renault exercised options to increase its stake in its Japanese partner to 44%. However both companies denied any intentions to merge completely.
In summer 2006, Renault-Nissan CEO Carlos Ghosn gave his support to an ambitious proposal by maverick US investor Kirk Kerkorian to force ailing American giant General Motors to join the Franco-Japanese alliance. The US group agreed reluctantly to consider the plan, and several discussions took place with Renault. However, talks were eventually ended in October 06 when it became clear that no satisfactory agreement could be reached.
In 2011, Renault was publicly embarrassed by a botched fraud. In summer 2010, the company received an anonymous letter accusing three senior managers of accepting bribes to leak confidential trade secrets. Renault then authorised several payments to the apparent source of that letter in return for further incriminating evidence. The three men were sacked in January 2011. However a subsequent investigation found the evidence supplied by the tipster to be entirely false. At the same time, it began to appear that the entire case had been fabricated, possibly with the involvement of a member of Renault's own internal security department. The three sacked executives received a public apology and compensation. Renault's gullibility in the affair came as something of a shock to the French public. Indeed, COO Patrick Pelata offered to resign over his clumsy handling of the internal investigation. That offer was declined but he was instead transferred to another role within the Renault-Nissan alliance, and he and other managers had part or all of their bonuses for the year cut. See full profile for current activities
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