By on September 30, 2008

This morning, Bloomberg took a look at Renault’s epic implosion in the past year. Financially, the big French carmaker saw its stock nosedive 55% in the past twelve months. Sales are down, and Renault’s European market share has fallen from 9.7% in 2005 to 7.7% so far this year. And Renault’s traditional strong market segments (i.e. mini-minivans) have been taking a beating from other companies, including French rivals Peugeot and Citroen. To make matters worse, VW is about to come out with a new Golf three weeks before Renault releases its new Megane, and the Golf gets better fuel economy than the Megane across the board. Nissan – of which Renault owns 44% – is at huge risk in the US economy (goodbye Murano, Pathfinder, Xterra, Armada, QX56, FX35, and Quest sales). Oh, and Renault’s big hope for making their estimates for the year is a €160 million royalty payment from Russian manufacturer AvtoVaz for licensing the design of the supercheap Dacia Logan. And speaking of which, Renault is facing declining sales for the Dacia Logan as the global economy gets crappier and people in places like Eastern Europe and Latin America have less money to spend on a new car. With all this in mind, Ghosn – once considered Nissan’s savior – may have to step down from the CEO position at Nissan as a bargain with irate shareholders so that he can keep his Renault job. And you thought things were bad for Chrysler.

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15 Comments on “Renault’s in Trouble, Ghosn May Step Down from Nissan...”


  • avatar
    Jerome10

    I love how this was the guy who 5 years ago everyone hailed as an automotive god.

    This guy is worse in Lutz in his arrogance and abilities. He was talking just awhile back about how if R/N+GM teamed up he could be at the top of all three.

    He’s a turn-around artist. Nothing I’ve seen says he knows how to run a car company after the cost-cutting is complete.

  • avatar
    readingthetape

    And I thought Fernando Alonso was just being petulant for not agreeing to return to the Renault F1 team next year.

  • avatar
    marc_m

    The Russians at AvtoVaz (it’s supposed to be pronounced something like Auto Vaz) must be brain dead for licensing that piece of crap Dacia Logan. For €160 million they can develop something much better on their own. Of course, Renault has been known to license their worst cars in the past, the Renault 12 comes to mind (aka. Dacia 1310). This isn’t that bad of news, another piece of crap car maker will be gone. I really hate Renaults, their poor quality, Deadly safety, and No reliability at all. Of course, I know that there are people who will have counter arguments to this, how ever, take a Renault Megane and run it on U.S. highways for a while, and see how long it lasts…

  • avatar
    psarhjinian

    He’s a turn-around artist. Nothing I’ve seen says he knows how to run a car company after the cost-cutting is complete.

    Yes, exactly. I couldn’t have said it better.

    Ghosn is exactly who GM needs (well, needed two years ago). Once his work is done, you want a steady-growth kind of executive, one that that sets conservative targets, is fully up-front about problems and has plans that detail how they’ll address them going five, ten or more years into the future.

    Guys like, you know, like Fujio Cho and Katsuaki Watanabe.

    Not that I’m saying this is a magic-bullet solution, but it’s interesting to note that neither man is an accountant or engineer (Cho is lawyer; Watanabe an economist, both came up as strategic planners)

  • avatar
    quasimondo

    I love how this was the guy who 5 years ago everyone hailed as an automotive god.

    I think it was a lot more recent than five years that people were worshiping at the Temple of Ghosn.

    Ghosn is exactly who GM needs (well, needed two years ago). Once his work is done, you want a steady-growth kind of executive, one that that sets conservative targets, is fully up-front about problems and has plans that detail how they’ll address them going five, ten or more years into the future.

    Rick Wagoner is doing the same thing Le Cost Cutter did for Renault/Nissan, which is trying cut his way back into profitability. It’s not working for Rick, and it won’t work for Ghosn if he took over for him. If anything, it would be worse for him since he’d face even stronger internal resistance at GM than he did when he took over Nissan. Nissan’s leadership knew they were in trouble, which made them more agreeable to his plans. GM’s leadership (and their board of bystanders) doesn’t.

  • avatar
    John Horner

    Hubris is killing Ghosn. The idea that he could manage complex operations in Japan, the US and France directly and personally by staying in orbit on Ghosn One Air was absurd from the start. I think he gave up the direct responsibility for the US some time ago, but still has his hands on the controls in both Japan and France. That just doesn’t work, especially when Renault and Nissan are affiliated, but independent companies with separate shareholders.

    Forbes did an article fawning over his globe trotting ways back in 2006, I remember reading it at the time and thinking no … this isn’t any way to run a railroad, or two.

    http://www.forbes.com/forbes/2006/0522/104.html

  • avatar
    incitatus

    marc_m :
    September 30th, 2008 at 11:36 am

    ” … Of course, Renault has been known to license their worst cars in the past, the Renault 12 comes to mind (aka. Dacia 1310). This isn’t that bad of news, another piece of crap car maker will be gone. I really hate Renaults, their poor quality, Deadly safety, and No reliability at all. …”

    I totally disagree with that statement. Dacia makes very reliable cars. People in Eastern Europe have very bad rods and with all that, most of these cars give you 20-30 years of ownership. They will break down from time to time but the beauty of them is their simplicity and ease of repair.

    Safety have come a long way lately, the new Dacia cars have all the safety features you can find in western cars.

    Judging the quality of a product has always a big subjective component. Yes, the plastics are crap, and there is no leather in these cars, but in the end a car is a mean of transportation from A to B, is like a tool for a job. Leather, DVD players, chrome pieces around your A/C vents and all the other BS they are selling you in the US in a car is just a way to cover a pile of dunk in a nice wrap.

    You show me a car with the same quality of a Dacia, that costs $8000 in US and I will be the first one to buy it.
    Dacia would probably do better than many other car manufacturers here in US.

  • avatar
    Adub

    Haha!

    “If anything, it would be worse for him since he’d face even stronger internal resistance at GM than he did when he took over Nissan.”

    Of course! We wouldn’t take no stinking orders from the French!

  • avatar
    Samuel L. Bronkowitz

    Really bad market has a way of making all the geniuses look mortal

    Unfortunately it makes the poseurs look even worse

    (discuss amongst yourselves who falls into which category)

  • avatar
    CarShark

    That reminds me. Where IS KatiePuckrik?

  • avatar
    psarhjinian

    Rick Wagoner is doing the same thing Le Cost Cutter did for Renault/Nissan, which is trying cut his way back into profitability. It’s not working for Rick, and it won’t work for Ghosn if he took over for him. If anything, it would be worse for him since he’d face even stronger internal resistance at GM than he did when he took over Nissan. Nissan’s leadership knew they were in trouble, which made them more agreeable to his plans. GM’s leadership (and their board of bystanders) doesn’t.

    I don’t entirely agree that Ghosn and Wagoner’s style of cost cutting is equivalent, but your point about the amount of internal resistance he’d face is true: he’d either be forced out (rather like Perot), or assimilated (like Lutz).

  • avatar
    Lumbergh21

    And you thought things were bad for Chrysler.

    Things are bad for Chrysler.

  • avatar

    Things are bad for Chrysler.

    I know, I tried to talk my aunt out of getting a fresh-off-the-lease PT Cruiser because I was unsure if Chrysler would survive this decade. She wouldn’t have any of it, she thought she struck a bargain. So I said, okay, take the risk. I just hope my fears don’t come to pass here…

  • avatar
    cpmanx

    The problems at Renault are real enough, but right now Nissan is holding up in the US market better than any other manufacturer, Honda included (though that may chance once the new Fit comes on line). So the story is not as black-and-white as some are presenting it here.

  • avatar
    HEATHROI

    They{the Dacia] will break down from time to time but the beauty of them is their simplicity and ease of repair, and (adopting ludacris eastern European accent and bushy moustache) it can be pulled by donkey or wife and mother in law in pinch

    You do know that Carlos Ghosen is friends with Jac Nasser.


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