France's Renault joined the ranks of European automakers bracing for a slower-than-expected 2008 on Wednesday as it warned its sales growth goal of 10 percent could be cut in half. The launches of its Laguna executive model and Koleos sports utility vehicle have proven ill-timed as slowing economies and record high oil prices chill sales across Europe.
The warning from Europe's No 6 automaker comes after rival PSA Peugeot Citroen this week said western European markets would shrink by 4 percent this year and Italy's Fiat SpA said it would temporarily close factories.
"The economic situation has changed dramatically since the end of the year. We now see sales up 5 to 10 percent with a bigger chance of 5 percent," Renault Executive Vice President Sales and Marketing Patrick Blain told reporters. That is in line with PSA Peugeot Citroen's target of 5 percent growth for 2008.
Renault Chief Executive Carlos Ghosn, in Lisbon to announce an agreement with Portugal on boosting the use of electric cars, said the remarks on sales were a sign of prudence, not of doubt about the company's products or strategy. "Realistically we are dealing in an environment which is very uncertain and we have to be very transparent in the fact that it can get better or worse," Ghosn told reporters.
Ghosn will make a statement on 2009 targets, part of a 4-year plan unveiled in 2006 that includes higher sales, profit margins and improved quality, on July 24 alongside first-half results, Blain said.
Renault said it increased sales by 4.3 percent to 1,325,504 vehicles in the first half of 2008, including Renault, Renault Samsung, Dacia and some Lada models. That topped French rival PSA Peugeot Citroen, Europe's No 2 carmaker after Volkswagen, which reported a 0.5 percent rise in the first half. But its slower-than-expected pace puts at risk Renault's 2009 target of an extra 800,000 cars versus 2005, Blain said.
Its global market share in H1 rose by 0.2 percent points to 3.8 percent. It increased car prices by some 1.5 percent in recent months but this was not enough to offset the rise in the cost of steel and other raw materials and more price increases will be needed, Blain said.