Renault chief executive Louis Schweitzer expects the European automotive market to increase about 1% this year, with French demand growing around 3%, Reuters reported.
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“We hope it (the European market) has bottomed out, but don’t expect a significant recovery,” Schweitzer told Reuters at the Detroit motor show.
The news agency noted that Western European demand slipped around 1.5% last year, putting pressure on carmakers to offer profit-eroding incentives, and few vehicle manufacturers in the region expect profit growth for 2003.
The French market has been particularly weak, failing to keep up with modest recoveries in other countries including Germany in the second half of the year, Reuters added.
“I think 3% growth in France is not over optimistic,” Schweitzer reportedly said, referring to 2004.
However, he anticipated no let up in pricing pressure, Reuters said, quoting Schweitzer as saying: “I don’t see any sign that real prices paid for cars will rise in Europe in the next year and that means the emphasis will continue to be placed on cost reduction.”
He also reportedly said he expected Renault to hold or maintain its market share in Western Europe at around 10.6 to 10.7% in 2004 as more versions and derivatives of the mid-sized Megane come to market.
Reuters noted that Renault last year overtook domestic rival PSA Peugeot Citroen in popularity among investors on hopes of sales growth from new models while PSA’s line up starts to age. [Peugeot has just launched a metal-top convertible derivative of its Megane-rivalling 307 and has an all-new 407 replacement for the aged 406 waiting in the wings.]
Schweitzer reportedly said the company’s profit goals of an operating margin of 3.5 to 4.0% for 2003 and over 4% for this year remained but declined to comment further on profit or unit sales developments last year.
Reuters recalled that Renault has said it will consider a return to the world’s biggest market of the United States after 2010. Schweitzer reportedly said there were no firm plans yet but noted the market was defined by diverse designs that Renault might be able to tap into.
“A winner might be in any category or of any size but it would need to attract a significant number of buyers and the product would have to spearhead the brand,” Schwetizer told the news agency, acknowledging that the Renault brand had little leverage in the US at the moment.
According to Reuters, he noted that by 2010 Renault would be sharing parts and platforms with its alliance partner Nissan, which produces in the US, [so] there could be a good deal of local content.
