Renault to rely on low-cost and electric cars to boost sales

Chief Executive Carlos Ghosn said that Nissan will roll out eight new battery-powered models and 12 hybrids. (AP)
Updated 06 October 2017
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Renault to rely on low-cost and electric cars to boost sales

PARIS: French carmaker Renault expects a first-mover edge in electric cars and a wider vehicle line-up for emerging markets to help it deliver a 44 percent sales increase by 2022.
Electric cars are “turning into a significant contributor to our performance while other automakers are just starting the journey,” Chief Executive Carlos Ghosn said on Friday.
Renault’s mid-term plan shows it growing faster than alliance partner Nissan, which it trails in China, due to recent investments in Iran and India and a Russian rebound.
While taking a lead in electric vehicles had come at the expense of profitability, Ghosn expects to turn this around by rolling out eight new battery-powered models and 12 hybrids.
“Our vision now is a profitable core business.”
Renault plans to increase sales to 5 million vehicles in 2022 from 3.47 million last year — while also targeting a 7 percent operating margin and €70 billion (SR308.23 billion) in revenue, goals that were announced in February.
Renault also said on Friday that its margin would stay above 5 percent over the intervening years, as it pursues €4.2 billion in cumulative productivity gains and invests €18 billion in research and development.
Renault shares rose 0.6 percent to €86.12 at 0757 GMT. The stock may be supported in coming weeks by “management’s increased confidence” on the mid-term goals, Evercore ISI analyst Arndt Ellinghorst said.
“This is good news in a world where most people fear earnings, cash flow and profitability will fall due to disruption,” Ellinghorst said.
China, where Renault only began manufacturing last year, is expected to account for half a million sales by 2022.
Renault’s budget car lineup, starting with the Dacia Logan in 2004, has underpinned the push into emerging markets and spawned a second car platform underpinning the Kwid mini-SUV, which has more than doubled the group’s sales in India.
Combined sales of the “Global Access” low-cost lineups are seen expanding 54 percent to reach 2 million vehicles, or 40 percent of the group total. An expanded utility van range is also expected to contribute to the emerging-markets surge.
The European share of Renault’s vehicle deliveries would shrink to 36 percent from 52 percent under the plan, with sales in the home region remaining broadly flat.
Renault had been transformed since 2005 — when he took over — from a carmaker dependent on French sales of Megane compacts into a “resilient, multi-polar global company,” Ghosn said.
Ghosn, who also heads the Renault-Nissan-Mitsubishi alliance, has not yet indicated whether he will seek to renew his Renault CEO contract, which expires next year.
Renault also outlined a new dividend policy on Friday, promising to increase shareholder payouts to 15 percent of earnings by 2022, from 7 percent last year.
In addition, it will continue to pass through its own Nissan and Daimler dividends to Renault shareholders. Renault owns 43.4 percent of its Japanese alliance partner and 3.1 percent of the Mercedes-Benz maker.


EU gives Nestle a thumbs down in Kit Kat finger row

Updated 19 April 2018
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EU gives Nestle a thumbs down in Kit Kat finger row

  • Nestle has been locked in a decade-long battle with US rival Mondelez, maker of Cadbury chocolate, over the four-fingered wafer biscuit, which was first sold in 1935.
  • The EU’s intellectual property office allowed Nestle in 2006 to trademark what the court calls the “three-dimensional shape of the ‘Kit Kat 4 fingers’ product.”

Luxembourg: The European Union’s top court should cancel Swiss food giant Nestle’s trademark for the shape of the Kit Kat chocolate bar, the court’s top adviser said Thursday.
Nestle has been locked in a decade-long battle with US rival Mondelez, maker of Cadbury chocolate, over the four-fingered wafer biscuit, which was first sold in 1935.
The EU’s intellectual property office allowed Nestle in 2006 to trademark what the court calls the “three-dimensional shape of the ‘Kit Kat 4 fingers’ product.”
Advocate General Melchior Wathelet said the European Court of Justice (ECJ) should dismiss an appeal by Nestle against a lower court’s 2016 decision to annul the trademark.
“Nestle did not adduce sufficient evidence to show that its trademark had acquired distinctive character,” Wathelet said.
He said the intellectual property office should now “re-examine” its decision.
The Luxembourg-based ECJ often, but not always, follows the advice of the advocate general, its senior legal adviser, when making its final judgment.
The food giant specifically failed to show that the Kit Kat shape was well enough known in Belgium, Ireland, Greece, Luxembourg and Portugal, relying instead on market data from other countries, he said.
The official also said the EU court should reject an appeal by Mondelez against part of the judgment, saying it was “manifestly inadmissible.”
Nestle has already lost a legal bid in Britain — currently an EU member state but set to leave next year — to trademark the Kit Kat shape.