For famed turnaround artist Carlos Ghosn, CEO, Renault, it’s time to get back to the grind once more. Although the company grew by 2.2% in 
worldwide sales for 2007, Ghosn has reasons to be concerned. His most popular turnaround Nissan would be bracing for a tough 2008, with the US economic slowdown looming. The company’s sales for the European region for calendar year 2007 also dipped by an alarming 4.1%. Investors have been looking bearishly at the Renault stock as well, which was trading at €84.55 on January 8, 2008, as compared to its 52-week high of €122.47. Predictably, Ghosn has stepped up his activities in emerging markets, his latest focus being Russia. Renault is inking a deal in February 2008 to take up 25% of ailing Russian car maker AvtoVAZ (with 70% of domestic car making), which has been continuously losing market share to foreign brands (its market share currently stands at 30% compared to over 50% in 2000) and has also been lurching in the dark for a bail out. The value is estimated $1.3 billion. GM & Ford were also in the fray.
Of course manufacturing under the Renault brand name could work wonders for AvtoVAZ. Surprising, though it may be to see such keen interest in a failing company, the logic becomes clear, seeing the booming Russian auto market, which is slated to be Europe’s largest and reach sales of about four million vehicles by 2015. As per Ashish Sinharoy, Vice President, Corporate Affairs, Renault India, “The move is tremendous, since AvtoVAZ is by default the largest car maker...” The JV will lead to technology sharing as well as combined production, in particular for AvtoVAZ’s low-cost Lada car.
With this JV, one can well expect things to heat up in the Russian auto market as GM & Fiat would certainly look for more ways to gain a foothold. As for Ghosn, he’s back to what he does best, turning things around!
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
worldwide sales for 2007, Ghosn has reasons to be concerned. His most popular turnaround Nissan would be bracing for a tough 2008, with the US economic slowdown looming. The company’s sales for the European region for calendar year 2007 also dipped by an alarming 4.1%. Investors have been looking bearishly at the Renault stock as well, which was trading at €84.55 on January 8, 2008, as compared to its 52-week high of €122.47. Predictably, Ghosn has stepped up his activities in emerging markets, his latest focus being Russia. Renault is inking a deal in February 2008 to take up 25% of ailing Russian car maker AvtoVAZ (with 70% of domestic car making), which has been continuously losing market share to foreign brands (its market share currently stands at 30% compared to over 50% in 2000) and has also been lurching in the dark for a bail out. The value is estimated $1.3 billion. GM & Ford were also in the fray.Of course manufacturing under the Renault brand name could work wonders for AvtoVAZ. Surprising, though it may be to see such keen interest in a failing company, the logic becomes clear, seeing the booming Russian auto market, which is slated to be Europe’s largest and reach sales of about four million vehicles by 2015. As per Ashish Sinharoy, Vice President, Corporate Affairs, Renault India, “The move is tremendous, since AvtoVAZ is by default the largest car maker...” The JV will lead to technology sharing as well as combined production, in particular for AvtoVAZ’s low-cost Lada car.
With this JV, one can well expect things to heat up in the Russian auto market as GM & Fiat would certainly look for more ways to gain a foothold. As for Ghosn, he’s back to what he does best, turning things around!
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
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