Risks assessment, automobile industry, Renault, US market, Pestel, political factors, economic factors, social factors, legal factors, motor racing, strategic partnership, AvtoVaz, alliance, Nissan
The Renault Corporation was founded in 1899 and quickly became famous in motor racing. The Renault factories adopted mass production techniques in 1905 and Taylorism in 1913. Then, during the First World War, the company turned out trucks, stretchers, ambulances, shells and even the famous FT17 tanks that made a decisive contribution to the final victory.
Renault, now a national corporation, modernized its plants, as well as building and buying new production sites. In 1993 Renault was interested by a merger with Volvo, but the project was dropped. In July 1996, the privatization of the company marked a milestone in its history. Taking advantage of its newfound freedom, Renault was interested by other markets.
First, in 2008, Renault acquired VAZ, a Russian automaker. For Renault, this operation increased sales base in Russia by setting Avtoframos. After that, a strategic partnership was signed between Renault and AvtoVaz. This partnership was necessary to keep pace with Russia's strongly growing automotive market.
But things did not go as planned. Indeed, the crisis made the situation difficult for Renault. Since October 2008, sales fall by 50% in the first eight months of 2009. Result: "We had to reduce output by a quarter and remove one of three teams of workers," sighs Jean-Luc Mabire. If the plant expansion will be completed well in 2010, the use of new capacity will wait for better days.
Many joint projects were possible thanks to this alliance (such as the gasoline tank, the steering-wheel stabilization system, and also led to the creation of institutional entities for "strategic command and operational coordination.) Since Renault and Nissan have successfully become partners in a new equity joint venture by combining their knowledge, they have reinforced their position as a worldwide leader automaker.
[...] After doing a market assessment, we can conclude that Renault can move to the United States. Indeed the risks we have seen can be controlled upon condition that Renault change their strategy and create a new range of product for the American market. Sources AutomoBear.com Chrysler-AMC-Renault story The Renault Nissan case study available at http://www.scribd.com/doc/3777250/The-Renault-Nissan-Case-Study) Oxford University Press “PESTEL Analysis” available at: http://www.oup.com/uk/orc/bin/9780199296378/01student/additional/page_12.htm Auto Supplier Support Program, “Stabilizing the Auto Industry at a Time of Crisis” 2008 http://www.treas.gov/press/releases/docs/supplier_support_program_3_18.pdf Wall street Journa “U.S. [...]
[...] This is not a good condition for Renault if they want to implant automobile factory in USA. Renault has to adapt their budget. Because of the financial crisis, Renault will have more difficulties to loan money in the United State. Consumer purchases of vehicles in USA increased during the beginning of 2005 but then have declined in the three quarter of 2005. It increased until 2007 II but then motor vehicle purchases declined again from 2007II to 2008III. After that, the 2008 tax rebate was felt in the second quarter. [...]
[...] The direct final rule amends provisions in the Automobiles and Light-Duty Trucks NESHAP. The goal of this provision is to clarify the interaction between the Automobiles and Light- Duty Trucks NESHAP and the National Emission Standards for Hazardous Air Pollutants for Surface Coating of Plastic Parts and Products (Plastic Parts NESHAP), also to clarify the meaning of certain regulatory provisions, and finally to correct certain errors identified in the regulatory text. Furthermore, EPA takes direct final action on amendments to the Plastic Parts NESHAP to clarify that screen printing is not subject to that rule. [...]
[...] If the plant expansion will be completed well in 2010, the use of new capacity will wait for better days. Since the initial investment in Moscow, made by former chairman Louis Schweitzer, in 1998, never the French group had experienced such difficulties. Second, the alliance between Renault and Nissan was sign the 27th march in 1999 by Louis Schweitzer and Yoshikazu Hanawa. It develops and implements a strategy of profitable growth still today. The objective was to establish a powerful automotive group and developed synergies while conserving the corporate culture and identity of each brand. [...]
[...] Indeed motor vehicles purchases increased in 2009 which is a good opportunity for Renault to sell their car in the United States. Social conditions are not positive for Renault insofar as the median household dropped. In other hand many American people identify with a specific brand already implanted in USA and want visible opulence. Renault has to consider this risk before move to American market. It's the most important risk because Renault's cars don't correspond with American needs. Thereby, Renault has to create a new range of cars specially adapted for the American market: four-Wheel drives (pickup). [...]
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